As I noted earlier today, sometimes the market provides you too many alternatives and you simply have to sit back and allow the market to fill in a bit more before it gives you a high probability structure. I think we are there now with the micro count.
In the bigger structure, my primary perspective remains we are in a whipsaw regime within a larger degree b-wave of wave . And, it has certainly been true to form when it comes to our whipsaw expectation. Just consider that we have now spent 7 trading days within a 200 point region, whereas before we would do 200 point moves within a single day. So, unless proven otherwise by a strong move through 2650, my perspective remains that we remain in b-wave purgatory.
As I outlined in the past, these structures can take many twists and turns as they complete. And, we may be seeing one develop today. Whereas we expected this downside resolution this week, our ideal expectation was that the [a] wave of the b-wave would take us down to the 2370-2400SPX region. Yet, we came up short today. So, either the market is going to provide us further downside tomorrow towards that target to complete the [a] wave, or this will get more complex.
The “more complex” structure is now presented in blue, whereas the standard expectation is bring presented in green. To this point, I want you to also see that my primary count is now fully in green within this wave . So, blue will be the alternative within that structure.
If the market rallies tomorrow instead of dropping to our target, then it would suggest that today only completed the a-wave of the [a] wave. If you need more help in understanding how this b-wave will take shape, please see my analysis from last night. But, without reaching the ideal target we set for this [a] wave of the b-wave, I have to consider that this [a] wave is going to take more twists and turns before it completes.
So, I want to outline the bigger perspective that you should take away from my analysis: As long as we remain below 2650SPX, the bias is that we are stuck in a b-wave purgatory which will provide many twists and turns and whipsaw. It will not be an easy trading environment, but we should retain a bias for lower levels.
Whether the market is going to drop down directly to complete this [a] wave of the b-wave is not something I am certain of at this time. Rather, it can still provide more whipsaw before that occurs, but the general target for the [a] wave will remain the same for now. Ultimately, we will need more of this structure to develop before we can be more confident in the micro count.
And, lastly, the yellow count still remains in the back of my mind, but there is much to prove before I can consider adopting a higher probability for that potential.