Market Update

Today, we saw the SPX push to new highs while the NDX continued to lag. The RUT also managed to notch a new local high, though it remains well below its prior all-time high. With this continued grind higher, the real question remains: how much more upside can this market squeeze out before we see any meaningful pullback?As we've highlighted previously, the count in this region is quite full and increasingly extended across multiple timeframes. That said, until we see a confirmed break of support and/or a clear five-wave move to the downside, we simply do not have confirmation of a top just yet.What does have my attention here is the structure unfolding in the RUT.

Today we saw the market move higher in the early morning session only to drop lower as we moved into the afternoon. We have currently retraced much of that afternoon drop but are still holding under the HOD as we move into the close. Given the structure of the move up off of the 7/7 low I am learning for this to see at least a shorter timeframe downside resolution but we still would need to see a break of support below to suggest a larger degree top may be in place.

Today we saw very slow market conditions as the market moved mostly sideways and is closing out the day very much where it started out. With that, I have very little to add to yesterday's analysis as we still are sitting over support but under the previous high. As noted yesterday, I’m still focused on the key price zones below; should those break, we would begin to see the initial signs that a top may be in place. Until and unless that occurs, the potential remains for the market to push higher, despite how extended the current structure is..I continue to monitor the 5929–5793 support zone closely, along with the structure of any forthcoming pullback.

While we did see some downside action today, price has thus far held even the uppermost support levels, offering no confirmation that a local top has been struck. Additionally, all major indexes continue to show only three waves down off the recent highs, still going us no signal of a top just ut. As such, the analysis and support levels outlined in last week’s update remain largely unchanged. I’m still focused on the key price zones below, should those break, we would begin to see the initial signs that a top may be in place. Until and unless that occurs, the potential remains for the market to push higher, despite how extended the current structure is..

The market continued its grind higher today, working its way up toward the next key Fibonacci resistance level I’ve been tracking on the SPX chart. This level, which represents the 261.8% extension from the move off the April lows, comes in at 6283. If we see further upside follow-through, this will be the next critical area of interest in the days ahead.That said, the market remains extended across multiple degrees and is now showing negative divergence on the 60-minute MACD. While these are important cautionary signals, we still lack a clear breakdown in support or a definitive five-wave move to the downside, both of which would be required to confirm that a top is in place.

As I warned in the weekend update, we needed to see a direct move lower in the complex early in the week to keep the count strongly in the c-wave down perspective.  Yet, when gold took out its Sunday night bounce high, I also warned that it would open the door to much greater complexity in our charts, including a potential b-wave triangle, and an ending diagonal for the c-wave down.  And, that is currently where we stand.In looking at the attached 60-minute GC chart, you will see I am outlining the potential ending diagonal structure for this c-wave.

With the market continuing to grind higher, it makes me more and more cautious the higher we go.  But, I assume you have gathered that from my analysis over these last few weeks.  Yet, as the market goes higher, it raises the support below us.  And, until that support is broken, we have no indication that any top has been struck, despite recognizing how stretched this rally has indeed become.So, with the action over the last 24 hours, I am moving our support up to the 6110SPX level.  We would need to break that support and follow through below 6080SPX to suggest a top has indeed finally been struck.

With the market seemingly rather quiet today, I want to remind you that we are still 100 points over the initial support I noted in the weekend update residing in the 6080-6095SPX region.  And, until the market takes that support out, the bulls are still fully in controlEven though I have noted that we are still well over support, I am going to highlight yet again that this is a very stretched and full count.  While a catalysts is certainly not necessary, I would suggest that you be ready for what can be a very aggressive reversal, as that is often seen when the market stretches one way or another.

After finding support on Monday and pushing higher, we've continued to see the market grind its way toward new all-time highs. While this move has certainly exceeded initial expectations regarding the depth of the rally off the April lows, the internal structure of that rally still leaves the bigger-picture count unchanged.One complicating factor has been the growing divergence between the ES and SPX charts, particularly due to the number of significant overnight moves that never appeared on the cash SPX chart. As such, while the larger degree structure remains largely intact, the subdivision of this C wave off the April 17th low can be interpreted in a number of viable ways.

My main premise has been that we are likely within a 4th wave consolidation/pullback in gold and GDX and a 2nd wave in silver, and I am still very much of that opinion.   The question with which we have been grappling is whether the c-wave of that 4th wave in gold and GDX and the 2nd wave in silver has begun? For now, I am still of the opinion that it has.In both gold and GDX, we have what can be viewed as a 1-2, i-ii downside set up developing.