Bulls Still Have A Path To 4960SPX

With the market rallying off Friday’s low (yes, you heard that again), we have a potential bullish count we can follow.  But, keep in mind, the bulls MUST complete 5 waves up back towards the 4700 region in order for me to be more confident in the green count.  Moreover, if we are able to complete the 5-wave structure presented on the 5-minute ES chart, then it would project us up to the 4960SPX region.

But, there is still a lot of work the bulls must do to prove their intention to rally to 4960 into January.    Let’s look closely into the green count on he 5-minute ES chart.

As you can see, I have added a pivot to the chart, which is the .618-.764 extension of waves [1][2] within wave [i] in the green count.  This means that any pullback seen right now must hold that pivot support, and then continue higher to the wave [3] target to keep the pressure up, and keep the bulls alive.  And, should we be able to rally to the wave [3] target, then I will move the pivot up for wave [4], as we still need waves [4] and [5] to complete to suggest that the bulls have a higher probability to point us to the 4960SPX region to complete the larger degree wave [3] of [iii] off the March 2020 low.

Should the market break down below the pivot before completing 5 waves up, then I will have to begin to more heavily lean on the yellow count.  But, as of now, Luke Miller’s Bayesian analysis, which has been outstanding this year, calculated the percentage of the green count at 60% at this time.

I want to also repeat something I said last week, and repeated in an update this morning:

For MOST people, the time to try an aggressive long position would be if  . . again, IF we fill in waves [i][ii][1][2], and then break out over wave [1].  That would trigger a rally to 4960SPX.  Until that triggers, it is probably best to bide your time, as the b-wave can still be the name of the game over the coming week or two.

So, for now, the bulls are doing what they must in order to keep the green count alive.  And, for all the reasons I set forth in my prior analysis, I am still going to track this potential until the market tells me otherwise. After all, this is still a bull market.

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Avi Gilburt is founder of ElliottWaveTrader.net.