I Am Leaning Green

With the market initially continuing higher today, I can make out the completion of 5 waves up in the futures, whereas the count is a bit more labored to come up with it in the SPX.  But, the more important factor is that the decline thus far is seemingly corrective.   

For this reason, I am leaning on the green 1-2 presented on the charts.  So, as long as the SPX holds over 5870SPX – the .764 retracement of the prior rally – then I can reasonably view the green count as my primary.  

Clearly, if we break down below 5870SPX, and then follow through below Friday’s low, it invalidates the green count and opens the door to the purple count, pointing us much lower.

Needless to say, there are issues with both the green and purple, as presented right now.  However, due to the action today, I still would have to give the edge to the green count, again, as long as support holds.  Should we begin to rally, I have added a pivot on the 60-minute ES chart.   I will adjust it once we have a confirmed bottom in this pullback.  But, the point is that should we break out over that pivot, then I would be using that pivot as our support for a continued upside move, ideally to new all-time highs.

Note that the standard 2.00 estimated projection for the green count does not provide us much higher in the way of a new all-time high.  So, I am going to assume we could see bigger extensions than standard in wave 3, should we see a break-out to the upside.

So, for now, the market is providing clear parameters, and seems to be corrective on this pullback thus far, which has me leaning to the upside in green.