Market Holds Support, Pushes Higher, But Remains Beneath Overhead Resistance
By
Today we saw the market do exactly what it needed to do to keep both scenarios alive. Price came down into the key support levels outlined in yesterday’s update, held firm, and responded with a push higher. That said, while the bounce is constructive, it is still corrective in nature, and importantly, we remain under overhead resistance.
As it stands, the rally off the recent low is only three waves. With that being said, because the red count is structured as a larger Ending Diagonal, it does not require a five-wave move to remain valid. That keeps the red count very much in play here. However, without five waves up, the structure of the next pullback becomes critical.
If we see a three-wave pullback, that would favor the red count and suggest continuation higher. If instead the market produces a five-wave decline, that would reopen the door for the white count and suggest the market is preparing for wave 3 lower.
Structure alone, however, is not enough. We still require confirmation through price levels. A break below 6791 would provide initial confirmation that the white count is taking control. A sustained move under 6762 would strengthen that case and shift focus toward 6710 as the next key support pivot. On the upside, a break above 6930 would resolve the current stalemate and put us firmly in the red count.
Until we see a decisive break either below 6791 or above 6930, we remain in a bit of no-man’s-land on the smaller timeframes. The market has defended support, but it has not reclaimed resistance. That leaves us without a high-probability edge at the moment.
With today’s inability to break down, my confidence in the white bearish count has diminished. However, I do not yet have sufficient structural evidence to lean confidently toward the red count either. In this environment, patience becomes a strategy.
For now, we let the internal wave structure and price levels noted above guide us. One of these levels will give way, and when it does, the market will likely provide the clarity that is currently lacking. Until then, we remain disciplined and objective until we have more clarity in the count.
