May Be A Good Time To Be A Spectator

First, I want to address the wave count.  In the SPX, the high today seems to have been made on a 3-wave structure.   Therefore, I am adopting the following wave count, wherein we may almost be done with wave iv.

I am assuming that today’s high was actually a b-wave, with today’s decline a c-wave.  And, that can actually complete all of wave iv.  

But, of course, we will need to see a CLEAR 5-wave impulsive rally off this support to suggest that our next target is going to be the 3971-4015SPX region to complete wave v of [iii].  

This now brings me to something I noted on Friday, and is well worth repeating today.  We have completed the high probability segment of the rally off the recent lows.   And, I see no real compelling reason to take further risk on the long side.  

The market has not yet proven itself with a full 5 waves up off the low.   And, we still have no indication that support is going to hold.  Moreover, even if we do see the rally in wave v of [iii], wave [iv] will likely bring us back down towards the region wherein we have found ourselves over the last few days.   So, again, I see no compelling region to take the risk on the long side of the market at this time.  

There are times that it may be best to remain a spectator and let the bulls and bears fight it out in this important region.   And, based upon the market context provided to us through our Fibonacci Pinball structure,  I think this may be one of those times.

Avi Gilburt is founder of