After breaking down below the 4th wave support, we have now landed at our support for the red [b] wave. The question is if we have completed the c-wave of the [b] wave, or if we have the dreaded lower low before we bottom.
As you can see from the 5-minute ES chart, I have outlined resistance between 3764-3782ES. Normally, I would say that as long as that resistance holds, I am looking lower for a lower low.
But, during the late morning and afternoon action, I can make an argument for a 1-2, i-ii structure having developed off the low. And, as long as we remain over the b-wave low, then there is potential for the next rally not to be a c-wave of iv, but to actually break us out of resistance noted on the chart.
Now, to take a step back, if you remember, we are looking for the market to bottom out in a [b] wave of an [a][b][c] structure, outlined in red. And, depending upon where the market bottoms, we are looking for a 5-wave structure to fill in a [c] wave rally towards 4100+. Should the bottom already be in place, and we break out through resistance, then the minimum target should be the 4118SPX region, wherein [a]=[c]. But, to be honest, due to how oversold so many stocks still are, it would not surprise me to see the 1.382 extension at 4279SPX, or even higher within this next [c] wave.
Of course, we will track the extent of the potential for this [c] wave depending upon how large the 3rd wave within the c-wave becomes. But, for now, I would expect a minimum of the 4100SPX region, assuming we hold our support box for the [b] wave.
As far as some of our larger degree perspectives are concerned, I will likely spend more time on that in this weekend’s update. I will also be changing our labels to make what is now the red count the green count, which suggests that it is my primary wave count. My alternative, which still allows for a higher high in the market, will be changed to yellow over the weekend.
In summary, we have come to our support for the [b] wave. Once we are able to see an initial 5-wave rally through resistance, we will have confirmation that we have begun the [c] wave, which will likely point us to 4100+ over the coming weeks.