Market Is Not Providing Any Evidence of a Lasting Bottom In Place Just Yet

Today, we saw a very muted reaction off of the lows after yesterday's sharp drop lower. This reaction is certainly not a positive development for the green count, which needs to both hold the 7235 low and give us a five-wave move to the upside to remain operative. So, with the inability to provide us with that five-wave move, I have to move to the red count as my base case for the time being and adopt the green count as an alternate path.

I noted in the main room that the futures charts are quite sloppy at the moment, given some of the overnight action, but the cash charts do appear to be tracing out a cleaner Fib Pinball pattern. So, with that, I am going to be using the cash charts rather than the futures charts for my analysis for the time being. Under that scenario, and per the red count, my base case is that we are working on a wave iv of (c), still needing another lower low to finish off wave v of (c). Under this case, we will need to hold under the 7474 level on three waves and then push back under the 7336 level, with wave v targets in the 7247–7102 region below.

If the market can push back over the 7474 level, then it would open the door for a local bottom to be in place. However, that bottom may simply be the bottom of wave a per the red count, and I would need to see a full five-wave move up off of the lows to suggest that we may have bottomed in the green count. Unless and until that occurs, I have to give the benefit of the doubt to the red count, which again does suggest lower levels before seeing any sort of push back to new all-time highs.