Explaining The Analysis - Market Analysis for Aug 3rd, 2026

Some of you are questioning why the 7580SPX level was so important to my analysis, and why a break of that region – even by a point – was so key in my work.

Well, first, one of the structures we were tracking was a i-ii downside set up. However, that set up fully invalidates when the market moves even one penny beyond the start of wave i. You see, that is one of the few rules that are set in stone in Elliott Wave analysis. A 2^nd wave can never retrace more than the start of wave i, at which time, the structure invalidates. And, since wave i down started at the 5780SPX region, moving through it invalidates that potential wave count.

Second, when tracking an e-wave in a standard contracting triangle (which is what we have been tracking for a potential (b) wave triangle), I view a move beyond the c-wave high as an invalidation of that triangle pattern as well. And, since the c-wave high in that structure was also at 7580SPX, a move through that invalidates that (b) wave triangle.

So, the move beyond the 7580SPX level by even one point invalidated both the triangle and the potential downside i-ii structure we were tracking. And, I wanted to take a moment to explain that in the afternoon missive.

In the meantime, the SPX has now moved beyond the smaller degree .764 extension, which now suggests that the .618 extension (7524SPX) is going to be rather important. Should the market break that support in impulsive fashion, then we move back into the (c) wave camp, pointing us down to the 7100SPX region. However, as long as we hold over that support in corrective fashion, and then break out over the 7654SPX region (the 1.00 extension), I will be forced to adopt the yellow count as my primary count, despite all the misgivings I have with the structure.

Overall, the parameters outlined this morning are now applicable.