Still Looking Up – For Now

While the market made a valiant attempt at breaking out through 5220SPX this morning, alas, it only was able to muster a spike and reversal at that resistance region.  This led to the break down below 5197SPX which I outlined last night would point us down towards the 5160SPX region.  

At this point in time, it looks like the deeper b-wave is taking shape.   But, it still leaves us with the same general perspective:  As long as remain over 5146SPX, then I am still going to be looking up towards the prior highs to complete the [a] wave of wave v of 5.

As an aside, this is one of the reasons that diagonals are treacherous trading environments.  All sub-structures take shape as 3-wave structure, which is no different than standard corrective wave action, which is much less reliable and much more variable than a standard impulsive 5-wave structure.  

Of course, should the market instead break down below 5146SPX, that would be a warning shot to the bulls.  And, should we follow through below 5091SPX, then opens the door to a major top already being in place.  But, for now, the bulls seems to be holding support, which still retains the higher probability for further upside in the near term before the market finally tops out.