Tomorrow Will Be Important

The market has been meandering within our signal region between 2159-2192SPX.  And, the break of that region will likely provide us with the near term direction.

For quite some time I have been noting that I have no desire to be shorting this market, since we are setting up a 3^rd wave higher.  And, I still feel that way.  But, we are still unsure of where wave I of wave (3) has completed, or if it has at all.

I want to show you the IWM chart, which has been quite a nice guide in 2016.  In this chart, based upon Fibonacci Pinball, we may still be attempting to complete wave i of wave (3), with us having been in wave 4 of i during the recent corrective, sideways action.   That means we could see a spike higher tomorrow towards the .618 extension in the 123.65 region, which would then set up a corrective wave ii decline.

This can also work out in the SPX, if the current consolidation has been a 4^th wave in wave i as well. 

So, it means I will have to watch both charts for the signal of a break out in the heart of wave iii of (3).  It means we will need a break out through BOTH 123.65 AND 2192SPX to signal that the heart of wave (3) is in progress, with a target of 2350-2375 in the SPX for just wave iii of (3).

And, again, a break down below 2159SPX is what we will need to see to even begin thoughts of the next corrective pullback, which will then set us up to head to our 2300+ targets for wave iii of (3).   But, the odds are that the market is setting us up for that major move, and our only question is still if we do get a bigger pullback before that rally begins, or if the market will keep everyone off balance and take us up there straight from here.