Time To Be On Our Toes
With the reversal today, it looks like the SPX has struck a local top. So, of course, the question is what top is it?
Well, I can make an argument that we had 5 waves down off today’s high. And, that adds complication. You see, 5 waves down opens the door that the yellow c-wave may have begun. But, of course, a-waves can also be 5-wave events, yet that only happens in the minority of circumstances, as the great majority of the time an a-wave is a 3-wave event.
So, I think it is reasonable to expect a bounce later today. The question will then be what kind of follow through to the downside are we going to see. Once the a/1-b/2 are in place, then I will set up a Fibonacci Pinball structure with the fibs, and will note the pivot. The market decline will have to then turn back up over the pivot in order to suggest that a 5th wave higher high is taking shape. But, if the pivot holds as resistance on the next decline, then it certainly opens the door in a BIG way to the yellow count.
So, as I said in the title of this update, its time to be on our toes, as the initial 5-wave potential to the downside does open a trap door for the yellow count to take hold. And, we will have to track it carefully to determine if the market is going to fall through that trap door or not in the coming days.