Another Tight Day In The Markets

Today we saw the market open flat and stay flat most of the day. We still have been unable to break down under the 5447 low thus giving us initial confirmation that we may have put in a larger degree top. We are however still under the previous high and the action up off of the low is still very sloppy and corrective in nature. 

While we have yet to confirm a top with a sustained break of the previous lows the overall pattern remains quite full in this region. Furthermore, both the Dow and the Russell 2000 are presenting much cleaner downside patterns. So with that, I still remain quite cautious in this region but we still need to see this break down under support to give us confirmation that a top has indeed been struck. 

So from here on the SPX I still am going to be looking for a full five down of one larger degree towards the 5381-5365 zone. This zone also is acting as larger degree support so ultimately we will need to see a sustained break through that zone to further confirm a top. Until that does occur however I still can't rule out seeing another push higher to finish off the wave (v) as shown in blue. 

As I noted yesterday the Dow is still showing a much cleaner downside pattern and today it managed to hold that pattern. From here we simply need to break under the 387.22 level on the DIA to give us initial confirmation that we have indeed topped in the wave 2 and are indeed heading lower in the wave 3. From there a full five down of one larger degree is still what I would be looking for to further confirm a top but again this pattern is much cleaner than that of the SPX at the moment. 

So while we have yet to confirm a top we are still trading with a very full pattern in this region with the Dow and Russell 2000 showing much cleaner downside setups. For now however and until we can actually break under support we still do not have that final confirmation of a top just yet.