Sticky Market - Market Analysis for Feb 22nd, 2021

The market has been seemingly stuck in the same general region for most of February.  And, I still have no strongly reliable micro-count upon which I can rely.

The one thing I did to my 5-minute SPX chart was to re-order the probabilities as I see them.   I have now re-labelled the 1-2 structure for green, and made the higher high potential an alternative in blue.   But, to be very honest, I cannot say that one is that much higher in probability than the other at this time.  Nor do I really like the way wave 1 counts at this time, but we are really getting a bit too big to consider this a wave iv pullback relative to the size of waves i-iii.

But, the main takeaway right now is the same. I am trying to patiently await the market’s set up for a 1-2, i-ii break out signal.  As it stands now, in the most bullish count we are just completing wave 2 within the corrective overlapping pullback in SPX.  And, as long as we remain over 3775SPX, I am viewing this as our wave 2 support.

Once completed, I am looking for a 5-wave rally that should complete below the 4050/60SPX region.   Should we see such a rally in the coming week or so, I would primarily view that as wave i of 3, and alternatively as a bigger wave 1 of [3], as shown by the alternative count in blue.

However, once that 5 wave structure completes, should we see a corrective pullback thereafter, and then a break out over the high of wave i, that will be my signal that wave 3 of [3] is likely in progress, and I will begin looking towards 4300SPX.  And, depending upon how waves i and ii set up, I will outline the relevant supports within that structure should you have the need for a much tighter support level if you intend on turning much more aggressive on the long side for the potential heart of a 3rd wave.

But, as I have said before, I still think we are – at best – at least a week or two away from that potential.  So, I am still trying to be patient as the market sets up our next break out signal.

5minSPX
5minSPX
60minSPX
60minSPX
Avi Gilburt is founder of ElliottWaveTrader.net.