Today the market opened up flat consolidated most of the day and then broke higher in the afternoon session. A very similar pattern to what we have been seeing over the past several session. Today we are now re-testing the all-time highs on the SPX thus invalidating the potential 1-2 setup that was in place to the downside and thus putting us in the wave v up off of the 7/18 low. Bigger picture the larger degree topping count is still intact at this point in time with overhead resistance coming in at the 3023-3045 zone.
The initial signal of a top now comes in with a break of the 2974 low with further confirmation coming with a break of the 2951 level. Although not required given where we are in the larger degree count seeing a full five-wave move back to the downside would also help give additional confirmation of a top. Furthermore, because we are likely forming an ending diagonal top in this region the reversal back down should be rather sharp. Failure to see a sharp reversal would certainly be a warning sign that something else may indeed be in play.
So while the signs at this point are still pointing towards this forming a larger degree top until we get some confirmation that this top has indeed been struck this still can continue to grind higher deeper into the resistance zone overhead.