Pullback Was Short LIved As Market Pushes Higher Keeping The Bulls Still In Charge

After seeing the market pullback slightly after making a massive run higher off of the March 15h low we saw the market today once again push higher keeping both the green primary impulsive count and the bullish posture very much in control. 

As I noted yesterday with what we can now count as a fairly clear start to an impulsive wave pattern up off of the lows we can continue to use our Fibonacci Pinball guidelines to project support, resistance/pivot, and target levels as this continues to push higher. This is giving us very clear parameters to work with and along with clearly defined targets, it lets us know if the pattern is going to begin to break down along with telling us when the alternate count no longer becomes reasonably probable. On that note and with this push higher I think the blue count has become much less probable at this point in time and have replaced it with a larger degree wave B top as the new alternate count that could take this to new lows. This is however very much an alternate path at this point in time and will only come into play if we start to break support AND we see a clear five-wave move to the downside. Unless and until that occurs we can continue to follow the parameters for the green impulsive path as laid out on the charts. 

From here that green primary count on the SPX should now hold over the 4455-4385 zone. This zone represents the 100-76.4 fib extension of the initial wave i/a up off of the lows. Assuming that level holds then I am looking for the wave (iii) of iii to target the 4525-4568 zone which should then be followed by another pullback for the wave (iv) of iii. Wave iii of the larger wave 1 up off of the lows should then target the 4568-4682 zone with the ultimate wave v of 1 targeting closer to the 4682-4751 zone. Once that full five up off of the low completes then we would be looking for a wave 2 pullback to set up the larger rally to new all-time highs that should take us into the end of the year. 

If we are unable to hold the 4385 level but rather break down below that level AND see a full five down off of the highs then it would open the door for this to be forming a larger wave B top in which case I would count the entire move down into the 4115 low as a large wave A and this move up a large wave B. Reisntace for this wave B comes in at the 4470-4744 zone. So with that and until we see a clear five up off of the lows per the green wave 1 then I will have to keep this yellow wave B alternate count on the table. Again for now this is simply an alternate count and as long as we hold over support I am still very much leaning towards this having put in a bottom in the larger degree wave (4). I do however need to have an alternate path should we fail to follow through so I therefore will keep the yellow count on the charts until we begin to break out over those upper resistance levels. 

As I noted yesterday we are following our Fibonacci pinball guidelines quite well here and we are now through the first inflection point that I laid out yesterday. So as long as this continues to hold over the support levels noted then the bullish count will remain very much intact and I will continue to look higher in the coming days and weeks ahead. The action to the upside may very well be grinding in nature which is quite typical of where we are in the pattern but is perfectly in line with the personality of a larger degree wave (iii) of iii.

SPX  60m
SPX 60m
Michael Golembesky is a senior analyst at ElliottWaveTrader covering US Indices, the US Dollar, and the VIX. He contributes frequently to Avi's Market Alerts service at EWT while also hosting his own VIX Trading service.