Market’s Footing Is Getting Shaky

My thesis coming into this week was that we were completing an ending diagonal for the c-wave of the (a) wave in this current corrective pullback in SPX.  Therefore, I was expecting a strong reversal, which should take us back to the region from which the diagonal began in a very swift move.

While the week started out by following that perspective, the fact that we have stalled now for almost two full trading days is starting to get a bit concerning about follow through in this potential (b) wave bounce back towards the 6850-6900SPX region.   Moreover, what is also a bit concerning is that the MACD on the 60-minute chart has almost reset back to the resistance region which has been struck by each corrective rally during this decline.   

So, as it stands right now, we have a potential a-b in place on the 15-minute ES chart.  Thereafter, the only way we can consider that a c-wave rally has begun is via a leading diagonal for wave 1 of that c-wave. And, most of you know that I do not view leading diagonal as reliable trading cues.  But, this is all we are left with at this time for this pattern.  Needless to say, this is another concern I have.

Therefore, I have to conclude that if we do not see a break out by tomorrow, or if we see a break down below the b-wave low, then the probabilities will be moving towards the potential that the (a) wave has not yet completed, and we can see a test of the 6360SPX region before it is complete.

Should we see a break out very soon, then I am going to maintain the wave count that we are in a corrective (b) wave rally.  But, I have that count on a very short leash right now.