Pushing On Resistance - Market Analysis for Oct 27th, 2026

As I write this update, the SPX is certainly pushing on the top of our resistance box. And, if you remember, I am maintaining the primary count of the 1-2 to the downside as long as the market does not break out through the resistance box in a sustained manner.

But, I also warned that this market has not been kind to short traders. That is why it is wise to wait for the market to provide to us a 5-wave decline to fill in wave i of wave 3 before making the assumption that the heart of a 3^rd wave down in the yellow c-wave of wave ii is likely in progress. And, as long as the resistance box is respected, I am still going to expect this resolution.

Of course, should we break out through resistance, then I have to assume we are tracing out a more complex b-wave, as presented in blue. But, even still, we would still need to see a 5-wave decline to assume that the c-wave down is in progress.

In the meantime, the only other potential I would consider is that the yellow wave ii has already completed, and we are starting a rally to new all-time highs, with targets north of 9000SPX. However, I really see this as a very low probability at this time, despite the fact that we have seen short and shallow corrections such as this over the past several years. And, even though I can make an argument for a 5-wave rally off he recent low, I still cannot consider this potential until the market provides more evidence that would force me to adopt this count.

For now, my primary remains that we are attempting to complete a wave 2 in the c-wave down, but we will need a 5-wave decline for wave i of 3 to make this more likely. Until such time, I have the blue b-wave as our alternative.