Getting Sloppy - Market Analysis for Aug 25th, 2020

Yes, folks, the action is starting to get a bit sloppy up here, especially in the IWM.  And, while I am becoming just as impatient as you are while we allow wave [i] to run itself out of room, I have become much more cautious.

While I have been warning you not to get to bearish because the market still had that open door to complete that larger wave [5] of [i], which was my former blue count, I am now going to warn you not to get too bullish, as the bottom will likely fall out pretty soon. 

For the last weeks, I have been highlighting the IWM structure and suggesting that it should still be pointing to one more wave higher before this rally completes.  Friday saw the completion of a corrective pullback, with Monday starting the rally off that support.  However, today that rally fell apart short of our ideal target, and has me questioning what the IWM is now trying to do. 

First, I want to note that until the IWM breaks below its Friday’s low, I am still going to be looking for it to rally to 160+.  Second, after running many calculations and scenarios, I think the most reasonable perspective is to view today’s high as the high of a c-wave in wave [1] of its final wave higher.  That would project the IWM into the 162 region sometimes next week.  I have updated the count on the attached 3-mintue chart to illustrate that pattern.

As far as the SPX is concerned, I truly do not have a high confidence micro count on it.  While we have struck the bottom of our next target, I still have no indication that we have indeed topped in wave [i] just yet.  And, as I noted last night, the higher this goes the higher we get projected for the entire 5th wave rally.  But, I do not think there is much left to go from a wave structure standpoint, as I have reiterated that we are quite full.

The other point of note is that I moved up our upper support region from the former 3185-3240SPX region, up to the 3270-3335SPX.  A break down below that support would make it likely that we are progressing in the a-wave of wave [ii] in the pullback I still expect in the fall.

Avi Gilburt is founder of