Market Is Still Looking Higher

If you have been following our intra-day work, you would know that I have been tracking the IWM quite closely, as it is the one chart that is keeping me looking higher for one more push before we finally top out in wave [i] off the March lows.  And, thus far, I cannot say that my opinion has changed.

As you can see from the attached 3-minute chart of the IWM, the market still seems to be pointing to a 5th wave rally into the 159/160 region before we complete this rally structure.  And, as long as we do not break back below the low struck on Friday, then I am going to be looking higher this week.

However, should the market break back below the low struck on Friday in the IWM, then I will have to begin considering that the market has finally concluded this rally, and that a wave [ii] pullback in the SPX has likely begun.

Now, a number of you have been seemingly quite frustrated with this market continuing higher.  I propose to you that this is a very short-sighted perspective you are taking.  You see, the higher that wave [i] takes us, the higher waves [iii], [iv], and [v] will project.  So, personally, I am quite happy that we are pushing higher.

The question I am sure you are asking is how high can we push in wave [i] in the SPX?  Well, our next target region overhead is in the 3440-80SPX region.  But, since standard proportions of a 5th wave suggest we can rally as high as .618 the size of waves [1] – [3] off the wave [4] low, that projects as high as 3600SPX for wave [5] of [i].  But, to be honest, I just do not see the structure being able to take us that high, as we are quite full at this time.

So, in summary, the IWM has been pointing us higher for one more rally before this potentially tops.  And, as long as we do not break down below Friday’s low, I am going to be looking higher this week.  And, as I noted earlier, the next target region in the SPX is 3440-80, whereas the next target region in the IWM is the 159/160 region.

However, if the SPX and the IWM break below the lows struck last week, then we have our initial indication wave (i) may have completed.  For now, I think the structure is still pointing to one more push higher.

3minIWM
3minIWM
60minSPX
60minSPX
Avi Gilburt is founder of ElliottWaveTrader.net.