Trying To Make It More Reliable

As I outlined over the weekend, the potential 1-2 downside structure was not terribly reliable due to the wave 1 being a potential leading diagonal.  And, as I have noted many times before, leading diagonals are not reliable since they resemble corrective structures and often invalidate as leading diagonals.

Therefore, we wanted to wait for another 5-wave decline to signal a 1-2, i-ii structure is developing.   With today’s decline, have that potential.  Ideally, I would much prefer a lower low for a better wave i of wave 3, but a corrective bounce at this time could provide us with a nicer set up for this 1-2, i-ii downside set up.

As long as today’s high is respected, and we then break down below the pivot noted on the 5-mintue chart (7396-7421SPX), without breaking back over the 7421SPX level thereafter, pressure will remain down, ideally to the support/target box below.  

Clearly, breaking back over today’s high will invalidate this count as shown and could open the door to the yellow alternative count.