Market At Resistance - Market Analysis for Oct 29th, 2020


With the downside follow through earlier this week, the market has now rallied back up towards resistance.  

Our main micro resistance is at the 3332SPX region.  As you can see from my attached 5-minute SPX chart, I am viewing the current rally as the wave iv within wave [iii] based upon where we are targeting today.   Therefore, as long as the market respects the 3332SPX resistance, I will be looking for downside follow through to the 3207-3246SPX region to complete wave v of [iii].

However, if the market should move through that 3332SPX resistance, it certainly opens the door to the c-wave taking shape as an ending diagonal.  And, if that should occur, then the amount of whipsaw we can expect will rise exponentially.    The NQ may be the best argument for that potential ending diagonal structure.

For now, based upon the larger degree structures, I still think it is reasonable and probable to expect the market to subdivide lower before this c-wave completes.  But, the path lower is about to be tested. 

Lastly, the only chart through which I can see a reasonable path higher immediately is with the IWM, as I have highlighted before.  While it is possible that the yellow count may take shape, I still view it as a lower probability, and the market will have to provide me with more of a 5-wave rally off today’s low to begin to consider this potential.  

Overall, I think the most probable path is still going to be lower as we move into November.  But, please keep your perspective on the bigger prize - - we are still likely in a bull market that is pointing us to the 4000+ region in 2021.

5minSPX
5minSPX
60minSPX
60minSPX
60minIWM
60minIWM
NQ
NQ
Avi Gilburt is founder of ElliottWaveTrader.net.