Market Moving Sideways But Still Well Above Support
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The market saw a small move to the downside today, but we're still holding well above all of our key support levels. With that in mind, there’s not much to update on the SPX/ES charts. The support levels remain unchanged from the past several sessions, and as long as those zones remain intact, we simply do not have a signal that a top has been struck.
Additionally, the structure on the Russell 2000 (RTY) doesn’t look complete just yet. It would still benefit from another push higher to better align with a typical Ending Diagonal (ED) pattern before any significant top is in place. If, however, we begin to break support, then we can start considering that a top may have been struck. But until that happens, the potential for further upside remains in place.
As previously noted, support on the ES chart comes in at the 6318 level, followed by a more meaningful zone in the 6239–6152 region. As long as we remain above those levels, ES can still make a push toward the next key overhead fib at 6527. On the SPX, larger-degree support continues to sit in the 6064–5929 zone. A sustained break below that area would confirm that a top has been struck, either in the blue wave a or red wave b count.
While we technically have enough waves in place on the RTY to consider a top in place, it's uncommon for an Ending Diagonal to complete with a move just marginally above the prior high. Typically, we’d expect a test closer to the upper trendline before completion. In that context, I’d want to see the RTY hold above the 2200 level and then make another push higher into the 2347–2371 zone. A break below 2200, however, would be an initial signal that a top may already be in place. But as long as that level holds, the pattern would look cleaner with one more high.
So, while the counts remain extended and I do remain cautious on the long side, until we see a break of key support and/or a completed five-wave decline, I cannot say with any confidence that a top has been struck.
