One More Potential For A Rally

With the SPX continuing to grind sideways, we still have one more potential set up for a last poke higher in this 5th wave off the July lows. 

As you can see from the 5-minute chart, if this last structure has morphed into an ending diagonal – which really makes the most sense based upon the micro structure – then the current pullback off the all-time high would be counted as a wave (iv) in that ending diagonal.  That means that as long as we hold over the 2987SPX region, we can still see one more poke higher before wave 5 is completed.  But, it is not something I would be strongly suggesting one trade for aggressively, as we often see these diagonals end in abrupt fashion before completing in the ideal structure.

As I have outlined many times before, once we do see a sustained break down below 2987SPX, that is our initial signal that this extended rally off the June lows has completed, and a correction has begun.  We will begin to assess what type of correction we will be tracking once we see the structure with which we break support.

5minSPX
5minSPX
60minSPX
60minSPX
Avi Gilburt is founder of ElliottWaveTrader.net.