Still In No-Man’s Land


I want to start this evening’s update by recognizing that there are an infinite number of paths the market can take at any time.  That is simply the nature of non-linear environments.   And, at times, it certainly makes for very frustrating times in the market when it is not terribly clear in the smaller degree structures, as we are currently seeing.

Yet, with our Fibonacci Pinball of Elliott Wave analysis, we are able to limit those endless possibilities to several paths that we believe the market can take, at least from a probabilistic perspective.  That is truly an exceptional amount of power if one can limit an endless amount of possibilities to a finite number of expectations.  So, while it may be frustrating to allow the market to provide us with a better near-term indication as to how this region resolves, please ponder when I just said.

In the meantime, I outlined the paths I am watching in an alert I posted earlier today:

“I am still forced to be tracking 3 paths here in the SPX because we did not hit the 4440SPX region, but have come up about 18 points shy of it.

1 -  We are completing an ending diagonal to complete a 5th wave towards 4440SPX.  Breaking below yesterday's low invalidates that potential.

2 -  The top has been struck, and it is a b-wave top, and we have begun an ending diagonal towards the c-wave target in the 4165SPX region.  I do not have a high probability expectation for this at this time, as one cannot reasonably draw a high probability expectation for an ending diagonal c-wave within this type of market structure within a bull markret.

3 -  The top has been struck and it is an a-wave top.  It means we do not see a higher high and drop down to at least the 4350SPX region for a b-wave.  If the market then provides us with a CLEAR 5-wave impulsive rally off that support box, then I will likely be moving into the yellow count as my primary count, which will be confirmed when we break out over the all-time high off the support box below, and target the 4550-4600SPX region to complete a larger wave 3 of [3], again, as presented in the yellow count on the 60-minute chart.  From here we will then get our wave 4 back towards the 4200-4300SPX region.”

As regarding path 1, we may still have potential to complete a standard Fib Pinball impulse for a 5th wave, and it points us just a bit north of 4440SPX.  But, we MUST get to at least 4440SPX in this structure for me to view this as a 5th wave.  

You see, if we get a higher high, but still hold the 4427SPX level, it would only count as a b-wave, as presented in yellow.  So, yes, it is still possible to see a new all time high up to as high as 4427SPX, and still be in the yellow count.  But, if we see that higher high, it would also increase the potential for the yellow count even more so, as we would not see a higher all-time high in options 2, as this would not fit the ending diagonal down in the c-wave towards 4165SPX scenario in option 2.

So, as the market gives us a bit more information over the next few days, it will allow us to narrow down the possibilities, and then have a much better idea as to not only how the current region will resolve, but it will likely provide us a much better indication as to how the rest of 2021 will likely take shape.  At the end of the day, we are trying to outline the high probability path to 4600SPX this year. 

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