It’s Decision Time

With the market completing its pullback yesterday quite quickly, we are now approaching our important resistance point – the 2890SPX region, which represents the 1.00 extension off the March low.

So, to reiterate our Fibonacci Pinball perspective, wave [iii] of [3] most often targets the 1.00-1.236 extensions of waves [1] and [2].  Thereafter, we see a wave [iv] of [3] pullback take us back to the .618-.764 extension.  And, if that support holds, then we rally onto the 1.382-1.618 extensions for wave [v] of [3].

In our case, the SPX is just shy of the 1.00 extension.  But, I think we have come far enough to consider the 2700SPX support now the hard support I will be watching in the coming week or so.  And, as long as all pullbacks hold that support, I am looking for continuation up to at least the 3060SPX region for wave [v] of [3].

But, I have added a micro alternative on the 5-minute SPX chart in yellow, which is a bit more bullish.  Based upon the structure I am seeing in other charts, it is “possible” that waves [iii] and [iv] may already be completed.  And, if we see a strong follow through over 2900SPX, then this is something that will certainly gain in probability.  For now, this is just something I am keeping in the back of my mind, and just presenting it to you for transparency purposes so you can understand what is going on in my mind in this region.

In the bigger picture, it has become rather simple for me.  As long as the SPX remains over the 2700SPX region on all pullbacks, then I remain bullish, with the perspective that the bottom has already been struck.  Moreover, if we can strongly break out over 2900SPX, then I am going to expect that we will likely complete all 5-waves up as shown on the 60 minute chart, and it can potentially take us into the summer time frame.

For those that are looking to add long positions, I think the wave ii (on the right side of the 60-minute chart) will provide you a wonderful opportunity to do so, since it will “likely” retrace back to the region in which we now find ourselves.  So, it is not likely you will be missing much by allowing the bulls and bears to fight it out in this region in order to decide the victor over the coming weeks.

However, if the market should see a strong break down below 2700, that will open the door to the purple count, and shift probabilities towards a lower low with an ideal target in the 2060SPX region.

Lastly, I want to let you know that Mike, Zac and I will be out starting tonight until Thursday night in religious observance of the final two days of Passover, during which time we are religiously forbidden to work.  Therefore, Garrett will be covering all our services himself.  So, I would request that you please keep this in your consideration before you post requests of Garrett over the next two days.  Thank you for understanding.

Avi Gilburt is founder of