Market Trying For Another 5 Waves

With the market providing us with the potential i-ii on Friday, which I highlighted over the weekend, we are now trying to complete a 5-wave rally back towards the highs.  But, of course, there is still the potential red alternative count which can take the market down in a big way. For now, the bulls have the ball.

There is an additional bigger picture point I would like to make at this time.  We really cannot entertain any bearish count as a high probability until we AT LEAST break down below Friday’s low.  And, even then, we would still need to break down below the 6720SPX support level to really start moving into a bearish posture, even if only for the blue b-wave pullback likely taking us back down to the 5700-6000 region.   So, we are going to have to take this one step at a time, and the bulls clearly have the ball over Fridays’ low.

In the meantime, we seem to be attempting to complete wave iii off Friday’s low, and potentially may have even moved into wave iv already, as we have struck the 1.764 extension of waves i-ii today. But, as I said over the weekend, we really need to see a bigger extension in wave iii if we are likely going to strike new highs. So, as long as we remain over 6903SPX, the market can still push higher in just wave iii.

Furthermore, as long as the market remains over 6887 (the 1.00 extension of waves i-ii), then I will continue looking higher for the completing of this 5-wave move off Friday’s low.  Should we break down below that support before completing 5-waves up, that will open the door to the red count.

The parameters are rather clear in this region for the SPX.  So, let’s not get bearish until the market makes it clear that is a necessity. But, make no mistake about it, this market is still very stretched off the April low, and when support begins to break, it will likely drop quickly.  Yet, let’s not get in front of that until support does break.