We came into the week with our ideal expectations being a rally to complete a b-wave. Last night, I reiterated this perspective:
We currently have a set up can take us to at least the 2080SPX region, as long as we do not break down below 2045SPX. Moreover, this set up can even take us as high as 2105SPX. But, the main point is that as long as the market remains over 2045SPX, I think we have more upside to be seen before the downside continues.
Today, the market struck the 2080SPX region. However, not only do we need to strike our target, the market must now provide us with downside confirmation. Since our next downside expectation is a c-wave, and they are usually impulsive, we need to see the market turn down impulsively. Moreover, our support below resides at 2070SPX, with downside confirmation taking us below 2064SPX. Should we, in fact, have a top in place today, then I am looking for the c-wave of (a) to take us down to the 1995-2008SPX region.
I also want to point out that today is a Bradley Turn date. So, rallying into this date does provide a bit more support that we could be topping. Moreover, the market has now rallied back to the underside of the uptrend channel from which we broke down, which held our rally up since the February low. We are also hitting out head on a downtrend line from the recent market high, and we are just below the downtrend channel from the all-time market high. So, clearly we have many signs of resistance up here.
However, until we actually begin to turn down, remember that this move up can still extend up towards the 2105SPX region. And, since we still believe this is a long term bull market, we must respect the bullish side of the market. But, I still want to reiterate that even if we head higher, I believe we will see levels lower than where we currently reside within the next month or two, and potentially even within the next several days.