Trying To Keep It Simple
By
Avi Gilburt
With the move down from this week’s high not counting well as a standard Fibonacci Pinball structure, it leaves us with the potential that the initial move lower was a leading diagonal for wave 1 of the (c) wave. And, assuming this is the correct count, that makes today’s bounce a wave 2.
This is where I add my usual warning about leading diagonals not being strong trading cues, as they can just as easily be a corrective structure. It is for this reason that I seek confirmation with a clear 5-wave decline for wave i of 3 to make this structure a much higher probability in following through to the downside. For now, I will simply assume this is a 1-2 downside structure developing, which will get invalidated by a move over this week’s high.
Clearly, the decline these last two days makes the yellow count an even lesser likely path. But, for now, I am going to leave it on the chart as an alternative.
This leaves me with a primary focus on the downside as long as we remain below this week’s high. And, once we complete 5 waves down to the support box below for the (c) wave, the bounce off that support is going to be a MAJOR indication as to how we will treat this market for the rest of the year.
Again, should that bounce be a CLEAR 5-wave structure, then we will be adopting the blue count and pointing us north of 8000SPX in the coming year. And, depending on how deep this (c) wave takes us into the support, the blue count can even project us a bit north of the 9000SPX mark.
However, if that bounce is CLEARLY corrective, then we will be looking for an initial 5-wave structure to the downside which will suggest that the red c-wave down towards the 6600PX region or lower. Of course, that can even be an alternative and deeper blue 2 until we break below the low struck at the end of March. And, we will have to then judge the nature of the bounce after that decline again.
So, the market is providing us with relatively nice parameters to follow in the coming days and weeks to guide us as to how we approach this market for the rest of the year.
