In going back to our plan, the market is following through quite well:
“I will be looking for the SPX to next challenge the 2135 region.” Overnight, the market struck this region in the futures.
“Should we see that region being struck, upper support is moved to the 2116-2123 region. It is within this region that we will be able to determine if the much more bullish path, as represented in green on the 60 minute chart, is being chosen by the market, or if a much more complex ending diagonal is taking shape, which will contain our upside target below 2165/75 over the next month, as presented in the red count. Again, I want to stress that, should the market continue to break out in the upcoming week towards the 2135 region, a pullback that fails to hold support between 2116-2123 would rule out the more impulsive green count, and have me view us as potentially topping earlier than expected.”
Today, the market dropped back down towards the upper support region. The next day or two of trading will tell us quite clearly if this region will hold. Assuming it will, then our next target is the upper blue box on the attached 60 minute SPX chart, with a minimum target of 2154SPX. And, that move would go a long way in supporting the more bullish count in the SPX.
For now, we have a plan, and we will follow that plan until the market tells us it is wrong. And, if we break down below the upper support region, then we will have to change gears, and consider the more complex diagonal, as opposed to the easier impulsive structure.