Is That All We Get?

I still think there should still be more downside to be seen before we are ripe to break back out in the SPX.  As the market meanders today, the SPX has a very clear 3-wave rally, which is most often a corrective structure.  Therefore, I believe it bodes well for further downside to be seen in the coming days.

Of course, the question is always how much downside can we see?

Well, as I outlined over the weekend, it will all depend on whether we can break down below the 5615SPX level before breaking out through the pivot overhead on the 5-minute chart.

Now, the market can always choose to break out before I expect it, even though the action still looks like it needs further downside before this consolidation completes, based upon standard pullback structures.  So, we always have to prepare for contingencies.  To that end, I posted the following alert to our full-time members earlier this morning:

“I would like to make a quick point about the more immediate bullish potential on the SPX.  IF, again, that is a big IF, the market chooses the more direct break out path, then the pivot represents about 17 points.  If we break out through the pivot in a more direct manner, then you can choose to buy long positions once we break out through it and set your stops just below the pivot.  That would give you approximately 20 points of risk for what could be a 400 point rally.   Again, just an idea IF we do see a more immediate break out.”  

So, at this time, we should be ready for whatever the market throws at us in the coming days.  The primary count is still pointing lower, but I am still questioning how low.  I am maintaining the primary count for a bigger wave 2, and will continue along that path until the market tells us otherwise.