While I have been tracking the rally in the SPX, the issue with differentiating the green (bearish) count with the yellow (bullish) count is that both will result in a 3-wave rally off the recent pullback low. So, it will take some time in being able to distinguish between the two, as I have outlined in prior updates.
For this reason, I have noted that I will be looking towards the IWM for additional clues.
Thus far, the IWM has completed wave [iii], and, today, we dropped down to the .382 retracement of wave [iii], and have potentially bottomed in wave [iv]. Of this morning’s low, we now have a potential i-ii upside structure for wave [v].
So, if you remember, should the market be able to rally in the coming day or two to complete wave [v], that would complete 5 waves off the recent lows, and begin to develop a set-up which can point us to 200+ in the coming weeks and months.
Therefore, I am still going to maintain a bit more patience, as a wave [v] should be quite evident over the next few days, should the market be able to rally. The next few days will likely be very telling. So, let’s see if the bulls can still hold on for one more major rally before a long-term bear market begins in earnest. If they do, we may have a buying opportunity in the wave 2 pullback.