The Market Is Teasing Us

I wish I could say that I am seeing a definitive signal of a decision in the market, but, alas, I will refrain from untruths.    The ES/SPX has still left the door open for that last rally higher as an ending diagonal.  We would need to take out Friday’s low to take that solidly off the table.

Moreover, whereas the IWM is still quite bearishly postured, there is some potential it can see a corrective bounce, during which time the ES/SPX can strike its higher high.  And, as I have said many times before, as long as the IWM remains in a bearish posture, I will maintain a high degree of caution.

Additionally, should the market break down below Friday’s low, I am now seeing the count presented in red as much less likely relative to the one presented in purple.  In other words, should we see a more direct break down, then we will likely head down to the 5000SPX region with wave 1 down completing as a leading diagonal.  

So, for now, our parameters remain the same. Immediate resistance is yesterday’s high with initial support being Friday’s low.  The first one to be taken out will likely provide us guidance as to the path the market can take for the next week or so.