The question in the title of the article is running through everyone’s mind right now. And, to be honest, the market has not made its answer clear just yet, as it is still just barely holding onto support.
As I have said numerous times, while I prefer the FOMO count to still take us up one more time to complete the 5th wave in the 2875SPX region, I do not think it wise to be trading for that potential 5th wave in what will be an ending diagonal structure.
As I also outlined in an update during the day today:
“If FOMO 4 is indeed going to hold, then this overlapping mess of a rally off the lows is going to have to begin to extend higher and through the 2770SPX region soon. While FOMO 5 would take the shape of an a-b-c structure because it is part of an ending diagonal, the fact that we have rallied in overlapping fashion is not necessarily [invalidating] that FOMO 5 has started.
However, if the market will roll over from here, and begin to drop strongly, then it would indicate that we are indeed in the heart of wave (iii) down in green, with the high we strike in this rally being the resistance we will use for keeping pressure to the downside.
So, for now, as long as we remain below 2765/70, pressure will remain down. Yet, the mrket has still not really broken support. So, if the market can break back out through 2765/70, it would give us much more confidence in the FOMO 5 count, even if we rally through it in what is seemingly a corrective structure, as that would only be the a-wave of FOMO 5.
I know this may sound a bit confusing, but, unfortunately, this is what we have to deal with due to the overlapping nature of ending diagonal's which develop in 3-wave structures.”
Not much has changed since I wrote this earlier today.
Currently, resistance is 2765/70SPX. The market will have to strongly punch back through that resistance to put us back on target for the potential of FOMO 5 to 2875SPX. However, if the market is unable to rally, and breaks down instead, then we will have to track for 5 waves down off the highs. That would complete wave 1 down off the b-wave high, and suggest we will see a shorting opportunity on the wave 2 corrective rally back up. I will not be able to outlined the target for that wave 2 until we complete all five waves to the downside, so we will have to wait patiently for that target. But, for now, I have placed a 2 in the general region of expectations.
So, the market has a decision to make right now. And, it will likely be over the next 24 hours that we will see the decision as to whether we have finally topped in the rally off the December 2018 lows, or if we can still stretch higher one more time for the 2875SPX region.
At the end of the day, I still believe we will be revisiting the 2500-2600 region in the coming months. But, the manner in which we get there will dictate whether we will reach the 2100-2200 ideal target for the wave 4 or not.