Still Over Support - Market Analysis for Jul 6th, 2020

For months, I have been giving the market the opportunity to prove it wants to rally towards the 3400SPX region to complete a nicer Fibonacci Pinball 5-wave structure off the March lows.  And, though the market whipsawed over the past month, it has still retained that potential to take us up towards that 3400SPX region for the blue wave [5].

Over the weekend, I outlined my expectation for another push higher before the market will likely make a decision.  And, today was that move up that I needed to see before the market would test its near term bullish potential.

However, we have finally come to the apex of that potential this week.  As long as the market now holds the 3115SPX support (.618 extension of waves 1-2 of wave [5]), I am retain a bullish bias and target the 3400SPX region in the coming weeks.  However, should we see an impulsive break down below that support, it makes it likely that we are heading down towards at least the 2900SPX region to complete the [c] wave of the green a-wave of wave [ii]. 

In the IWM long set up that I identified last week, I want to show you how the RTY (Russell futures) looks at this time, since it includes the wave action seen on Friday.  Currently, we have a i-ii, [i][ii] bullish structure in place  - at least as long as we hold over the Friday low.  This keeps that bullish potential I identified last week in IWM still on my chart.  However, if the RTY should break down below Friday’s low, it would invalidate this immediate upside potential, and put me into a neutral stance on IWM.

Should the IWM break its immediate bullish potential, and then break below 138.60, along with the SPX impulsively breaking below 3115SPX, then we will begin to target the 2900 region in the SPX, with strong potential to extend down towards the 2835SPX region for the [c] wave of the a-wave of wave [ii] in green.

So, I think we will finally see a decision in the market in the upcoming week, as there is not much more wiggle room for the bulls at this time.

5minMicro
5minMicro
60minSPX
60minSPX
5minRTY
5minRTY
60minIWM
60minIWM
Avi Gilburt is founder of ElliottWaveTrader.net.