I have made it quite clear that as long as the market continues to hold support on pullbacks, I have to give the blue count suggesting a more direct move to the 5000SPX region the higher probability.
Yesterday, I was looking for a high to wave [iii] of v of 3 in the blue c-wave in the 4899-4909SPX region. And, we topped just below 4904SPX, and began this pullback. As the pullback was progression, I posted this alert in the room yesterday afternoon:
"This market has extended beyond all reasonable expectation during this rally off the October low. And, while my primary view is that we have begun wave (iv) pullback, I do want to note the potential for an extension in wave (5) of (iii) presented by the alt i-ii. This would point us to the 5000+ region in the ES.
So, as long as we hold below today's high, I am maintaining the wave (iv) count. However, if we take out today's high, I have to move into the extension potential pointing to 5000+ES."
If you now look at the 5-minute ES chart attached, you will see that I have outlined a pivot, which I posted early this morning. As long as the market respects this pivot, I am viewing us as being in a wave [iv] pullback. However, if the market breaks out over the pivot before completing a lower low in wave [iv] relative to yesterday's low, then I have to view the pivot as support, and view us as being in an extension in wave [iii], which is pointing us to 4999ES+.
For now, my primary count is wave [iv] unless we see a break out and hold over the pivot. And, should we see an appropriate pullback continue lower for wave [iv], I am next looking for a rally to 4955SPX for wave [v] of v of 3.