Pattern Fills Out to the Upside, but Market Remains Over Support… For Now

Heading into yesterday’s close, the downside action appeared corrective in nature, and the structure to the upside seemed to be missing a wave. That missing wave was filled in overnight, as we saw a push higher that potentially completes the pattern. Since then, we've pulled back from the overnight high and are currently trading slightly in the red, with the decline off the high taking the form of a three-wave move, though sharper in character than what we saw yesterday.

So, while we remain over support for now, I’m approaching the long side with continued caution. We still lack a clear five-wave structure to the downside, and support has yet to break. That means we do not yet have a confirmed top in place, and the market retains potential for further upside. That said, with a potentially complete structure into this region, I remain on high alert.

As long as support holds, the parameters outlined in previous updates remain fully intact.

On the ES, micro support continues to reside at 6318, with a more meaningful support/pivot zone below in the 6239–6152 region. As long as these levels are respected, we retain potential for another push higher toward the next fib resistance at 6527. Similarly, on the SPX, key support remains in the 6064–5929 region. A sustained break below that zone would be needed to confirm a top has been struck, whether in the blue wave a or red wave b count remains to be seen based on the structure of the inital move down. 

The RTY continues to show relative weakness, and at this point, it would take a fairly outsized move to see another higher high. Still, the structure would look cleaner with one more push higher before completing. Ideally, I’d like to see the RTY hold above 2200 and make one final move into the 2347–2371 zone. A break below 2200 would be the first warning of a possible top, with stronger confirmation coming on a break of 2147.

Bottom line: while the counts remain extended and we’re seeing some early signs of potential topping action, we do not yet have the structure or confirmation to say the top is in. Until we see a clear five-wave decline or a sustained break of support, I’m staying patient and letting the price action in the days ahead provide that signal.