Still Holding Support - Market Analysis for Dec 10th, 2019

With the SPX spiking below 3130, and then reversing, I cannot say that we have a clear break down below 3130SPX just yet.  And, while the ES has provided us with a potential 5-wave break down below that level, I cannot say I have the same clear structure in the SPX. 

But, other than the micro structure in the action over the last 12 hours, I have to say that the one factor which gives me pause is that we still only had a 3-wave rally off the 3070SPX low.  Moreover, that rally had a perfect a=c structure.  For this reason, it is hard for me to be confident that we are heading directly higher at this point in time, and if we do, it will likely complete as an ending diagonal.  But, the main point is that I do not have a clear impulsive structure off the 3070SPX low.

And, since I do not have a clear impulsive structure off the 3070 low, it would more likely suggest that the rally off that low was corrective in nature, which still suggests we can see further weakness as long as we remain below 3151SPX.  As you can see from the 5-minute chart, that weakness can take shape as either a 5-wave c-wave in dark green, or this region can morph into a 4th wave triangle.

The other potential is that the larger pullback to the 2900-2950SPX region within the blue/purple count is in progress, but we cannot make that assumption until we see a break down below 3065SPX.

Ultimately, it means there is nothing further to really add since the update yesterday evening.  Ultimately, as long as we remain over 3065SPX, the market retains potential for a very extended 5th wave higher towards the 3.00 extension of waves 1 and 2 off the October low.  Should we be able to break down below 3065SPX before we break out over 3151SPX, then it would place us squarely in the blue/purple counts. 

Lastly, keep in mind that if we do see that higher high over 3151SPX, it would reset the potential for the green count, and we will need to watch the structure of the decline off that high to know whether we rely upon the green count, or if we have to move towards the blue/purple counts.

Avi Gilburt is founder of