Topping Action? - Market Analysis for May 5th, 2025
By
Avi Gilburt
Whether the market has actually struck its top to this [c] wave rally, or has another push higher is not something I can state with certainty. But, as long as the ES remains over the 1.00 extension at the 5649ES level, then I am leaving the door open that today’s pullback is wave iv of wave 5, with one more push higher yet to be seen to complete wave 5 of the [c] wave.
So, that would mean that a break down below 5649ES would be an initial signal that a top has potentially been struck, with follow through below the iv/[iv] increasing that probability. When we follow through below the wave 4 low, then it confirms the top is in place, and that the market is dropping in either the red wave 1 (the impulsive decline) or the blue b-wave (the corrective decline). We have discussed what the ramifications of these paths represents many times before.
But, in my current 60-minute chart, I have added a yellow count. But, I want to warn you that this count will ONLY be an alternative in the event that the market pulls back correctively. For if the red count becomes a very low probability and the blue count gains in probability, the yellow count will represent a bearish alternative. It would suggest a more protracted b-wave. And, once that yellow [c] wave rally completes, and if the market then provides us with a 5-wave decline, then we will be forced to adopt the yellow count, and assume that the market will begin its decline to the 3500-3800SPX region. So, in effect, this is another path that the red count can take in a more protracted b-wave structure. And, should the next decline be corrective, I will go into greater detail about the yellow count at that time.
For now, I am going to expect the market to attempt to push higher one more time for as long as hold the 5649ES region. Should that break, then we will be seeking confirmation that this [c] wave rally has concluded and will begin to seek evidence of the nature of the decline so we can assign probabilities to either the red or blue counts.
