SPX Still Pushing Higher

Overnight we saw the ES pullback into the micro support zone that we had laid out last week for the potential wave (4) and then push higher today giving us what can count as a fairly clean five up off of the 7/8 low. Unfortunately, the micro count on the SPX is not quite as clear as the SPX opened very close to the close on Friday thus we are missing that dip for that wave (4). With that being said I am going to give the benefit of the doubt that we did indeed get five up off of the lows in both the ES and SPX. 

That then leaves us watching two paths from here with the primary being that we are in a wave 1 of a larger wave (iii) of 3 up and the alternate being that we have completed all of wave 3 shown in yellow. Under the primary path, we should see a corrective retrace soon for a wave (ii) which would need to hold the 7/8 low which should then be followed by a strong push higher for the wave (iii) of 3 per the green path. If we were to break the 7/8 low then it opens the door to this having already topped in the yellow wave 3 at which point we would expect to see a larger corrective pattern take shape into the end of the summer. Once we do get a signal of a local micro top we can layout the ideal support zone for that wave (ii) but again from an invalidation perspective, we need to hold over the 7/8 low on both the SPX and ES to keep the green count valid and the primary path forward.

Finally, I do want to note that while still less than ideal I have not fully ruled out the possibility of the larger degree wave 1 which I am showing iQn purple on my 60min SPX chart. While the overall large degree pattern would be different under those two scenarios should they occur in the near term they would actually look very similar as they both would be larger degree corrective patterns that have similar support regions. 

SPX 10m
SPX 10m
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.