Bulls Are Trying To Take Back Control
By
Avi Gilburt
Despite the futures break below the .618 extension in the blue count, the SPX only had a marginal move below it. And, as I have been outlining, I still could not completely discount the blue count. Today, the market may have completed 5 waves up off the recent pullback low, which brings back the blue count. So, let’s discuss it.
First, I want to note that a 5th wave in a 5-wave Fibonacci Pinball structure usually targets at least the 1.764 extension of waves 1-2. And, as you can see from the attached 5-minute ES chart, we have not even reached the 1.618 extension. Yet, there still is a reasonable perspective to count 5 waves up off the recent pullback low, as shown on the chart, despite it coming up short.
The question now is if the market pulls back correctively or not. Should we see a corrective pullback and then rally over the high of wave [i], it will point us to at least the 4900SPX region in the blue count, which would then be wave 3 of the c-wave of [5] in the blue count, which can be seen on the 60-minute SPX chart.
Of course, if the market declines in a clear 5-wave structure, then the rally today was simply the 5th wave in the c-wave of the [b] wave.
At this time, I cannot discount the blue count anymore. And, if we see a clearly corrective pullback over the next day or so, then it becomes a much higher probability. And, if we then break back over the high of wave [i] and follow through over 4802SPX, then it becomes a very high probability that we are on our way to 4900+.
