Another One Bites The Dust?

Over the last number of months, the SPX has tested the 6550SPX support region to which I have been pointing multiple times, and we have yet to see a sustained break of that level despite numerous tests of that support. And, with the SPX closing in on the 6770SPX level (technically 6770.35), we are very close to an invalidation of the wave count shown on the 5-minute SPX chart.  So, will yet another downside set up bite the dust after a successful test of 6550SPX support?

I cannot answer that one just yet, but it is not looking good for it to hold due to how much we have retraced.  But, until we actually break out to 6770.36, the count remains alive.

In the event this count breaks, it does open the door to higher highs.  Yet, when I look at the 60-minute chart, I really have a hard time coming up with a reliable and likely wave count that takes us there.  In fact, from a standard technical analysis standpoint, we are only retesting the bottom of the trend channel from which we have recently broken down, and the 60-minute MACD is now only hitting its resistance box.

But, if the market does break out over 6770.35, I have no downside structure in place to point towards which would project to a sustained break of the 6550SPX region. Yet, I also have no high probability structure pointing us to higher highs.  So, unfortunately, it leaves us in a bit of a no-man’s land until the market gives us more clues as to the next 100+ point move.

So, if we do break this downside set-up, then I am going to have to maintain a bit more patience to see how the market takes shape thereafter to suggest which way we are headed.   And, while I know we have basically been griding sideways in the SPX for many months now, until it provides us with more of a high probability structure, there is not much more we can do.

For now, I have to lean to the downside until 6770.35 is broken.