Working Through Its Progressions

Until the market finally clears up the micro counts up here, I am going to be working through the progression of wave counts similar to the manner in which a quarterback works through his progressions with his receivers.  And, of course, both our goal is to take us closer to the end zone to score.

With the market pushing a bit higher this morning, I still only have 3 waves up into the high struck today in the SPX/ES.  And, again, this counts well as a [b] within wave [iv], as I have it outlined on the 5-minute ES chart.  While the move down is not clearly a 5-wave decline (which it ideally should be if this is the start of the [c] wave), clearly is does not make me highly confident in this structure at the moment.

The other potential is outlined on the 5-minute SPX chart, which suggests the rally off last weeks’ corrective pullback is taking shape as an ending diagonal.  And, if we do head higher in that structure, then I have no choice but to assume that last week’s pullback is all of the wave [iv] we will see, and the next pullback is going to be wave ii.

I have gained further confidence in that possibility based upon the IWM action this morning.  The IWM has breached an important resistance point.   While the rally off the recent low in the IWM has been terribly overlapping, it does now give me a little more confidence that the rally is wave i of 5 of [3].  This means that the IWM and SPX are trying to align in setting up their respective waves 5 of [3] as we look towards 2022.  This is something we for which we have been eagerly awaiting for many months, and it may be developing as we speak.

In the meantime, the bottom line is that I am still looking for a larger pullback to take shape in the coming weeks before we are ready to begin that rally to our next bull market target in the 4900-5163SPX region to complete wave [3] of [iii] off the March 2020 lows.  But, I still think a bit more patience will be needed before the market tips its hand as to its micro count up here.  Ultimately, I still think we pullback to the 4400-4500SPX region in a wave ii before we are ready to rally to 4900+.

5minES
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60minSPX
60minSPX
IWM60min
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Avi Gilburt is founder of ElliottWaveTrader.net.