With the market breaking through 3151 today, it has made its decision of a direct path for a 5th wave. And, as I have been outlining, it looks like this 5th wave is taking shape as an overlapping ending diagonal.
Yet, simply because we have overlap does not mean that this upside has run its course. Rather, it looks like we may only be completing the 3rd wave in this diagonal, and a 4th wave can drop as deep as the 3115/20SPX region. So, until the market actually breaks down below 3115SPX, we have no indication that this 5th wave has completed off the 3070SPX level.
Now, what is most interesting is that this higher high potentially re-sets the green count on my 60-minute SPX. But, we will not have any indications as to how likely that count will be until we see how the market breaks back down below the 3070SPX support. Should we see a clear impulsive decline off the highs and breaking below 3070, then I can retain that count as likely. Yet, any corrective break down below 3070 will have me clearly within the blue/purple count.
Moreover, if we do push higher, then I would begin to discount the potential in the purple count, which will then suggest the more immediate bullish count will stand at the top of probabilities should we see a corrective break down below 3070SPX.
So, for now, I need to see a break down below 3115SPX to provide an initial indication that this 5th wave – which has now extended to almost the 3.00 extension of waves 1 and 2 – has completed, with the break down below 3070SPX providing us with confirmation. And, the structure of that break down will provide insight into the bigger potential we are tracking as we look towards the year 2020.