Addendum For This Evening

With the market breaking down below the prior support from yesterday, it has certainly opened the door to a more direct move down in purple.  Yet, I still have some issues with that potential.

First, we are seeing a positive divergence develop on the 60-minute MACD.  Of course, this can break if we continue lower.  But, for now, it still suggests a bit more caution.  

Second, I can count a triangle in today's wave action, which would usually suggest a [b] wave.  Of course, I can view it in another way, but it is a reasonable triangle count.

For these reasons, I am going to give the market until tomorrow to see if we are going to see an impulsive rally back up towards the 6000-6056SPX region for a c-wave of wave 2, with this lower low being an expanded b-wave. Take note that this places the purple count at a much higher probability right now, with the green count being my alternative now.  In order for the green count to prove itself, we will need to see a CLEAR 5-wave rally, followed by a corrective pullback, and then a rally back over the high of the initial 5-wave structure.  Until that is seen, I am treating this like the purple count, with our targets down in the 5600SPX region.

Should the market continue lower below the break-down pivot tomorrow, then bounces can be shorted if you so choose, with the pivot being the resistance.  The shorting opportunities would be on the wave iv bounce, and the wave 4 bounce.

As for me, I would much rather allow the market to sub-divide down into the 5600SPX region, and begin to build a long position as we are completing that 5-wave decline.  Remember, this would still likely be more of a bigger wave iv with a wave v rally yet to come before a top is likely struck.