Do We Have 5 Down?

This morning, the market turned down right below the all-time highs, and we seem to have developed an arguable 5 wave structure off the high.

If you remember from our larger degree analysis, one of the potentials from this region is a larger degree (c) wave (red count) to take us down to a 19-handle.  And, if the market did not provide us with an arguable 5 wave structure off the high, then this potential would have been eliminated.   But, with today’s action, it remains in the running.

Does that mean I am willing to go leveraged short right here and now?  Absolutely not.  But, what would get me to go short is if we see a bigger 5 wave decline – with this being wave 1 of that – taking us down below the 2090 level, which I have noted a wave i of the (c) wave in red.  Until we see that degree for a 5 wave move, I do not have enough confidence to trade for a 19-handle at this time.

So, it also still leaves the other potentials on the table for now, both of which will provide a higher all-time high.  And, as I said a little over a week ago, it is still going to take us several weeks until we are able to see enough clues to provide us more clarity of the pattern the market is tracing out within this region.  So, I remain patient as the market reveals more information about the next larger 200+ point move.