Morning Update - Market Analysis for Dec 13th, 2022

With the break out over resistance, the market has certainly opened the door to the 4300+ region sooner rather than later.  But, we are not yet done.  If I am going to be honest, then I will say that I really only can count 3 waves up.  Which means we still need to get to the top of the resistance region above to even consider a 5-wave structure in here.  But, if we do get that i-ii structure in blue, it would project to the 4500SPX region, and well beyond 4300.

So, I posted my plan in the trading room earlier today:

I am going to give you my plan for trading higher.  As you know, I have raised a nice amount of cash in rallies this year.  And, if this blue set up develops and then breaks out, then it likely is targeting the 4500SPX region.  

But, since it is hard to trust these structures, I am personally going to wait to see if we get the i-ii set up to develop.  If it does, then I will likely either begin buying after seeing a 5 wave rally off a wave ii bottom (and begin buying on the pullback after that 5 waves off the ii bottom) and then will add on a break out over the wave i high.  Since the target is 4500 (maybe even higher depending upon extensions), I am looking to play that safer than more aggressively at this point in time.  So, I am going to wait for more assurance to add back long positions.

As far as the 60-minute chart is concerned, again, we will likely open over the downtrend channel.  NORMALLY, the market comes back and rests it from above in what I would call our wave ii pullback, and then rallies in wave iii if the test is successful.  If it fails, then we will likely drop to the top of the bigger support box below in the c-wave of (2)/(b).  

Unfortunately, the manner in which the market has been moving has been quite erratic.  So, I am simply looking for the most reliable spot to add longs for a potential run to 4500SPX. And, I want the market to prove itself before I move cash back into the market.  But, remember, I may be more conservative than you, so consider that in your own personal assessment.

For now, I am waiting to see if we get a 5th wave higher high to the top of resistance.  But, if we break down below 4034SPX before then, then it likely means we have an expanded b-wave high.

Avi Gilburt is founder of