Bottoming (b) Wave

The main point I left you with overnight for the SPX was that “as long as we remain below the 2126, then I am looking for the c-wave down to the lower support region.”  As of today, we are hovering over that lower support region.

However, please note that I had to modify the targets within that support region a bit.  Since the (c) wave rally only struck the .764 extension,  rather than the 1.00 extension at 2126, I had to lower the targets.  The main target on the SPX is the a=c at 2086, with the extended target as low as 2072 (c=a*1.382). 

From the larger perspective, I am still looking for at least one more rally leg up to the 2150 region, as long as we maintain the upper support region.  A break down below the upper support region would be a strong indication to me that we are in the larger degree 4th wave down to 1800SPX, with a break of 120 in the IWM confirming that.

I know that this action has been quite difficult for most.  I also know that we are trying to feel our way around a topping process in the market.  We have dealt with much whipsaw in 2015, and I do not want to step into a situation where we are shorting aggressively only to be whipsawed yet again.  So, I will allow the market to tell me when the upside has completed, so that we can more confidently begin to trade for the1800 target.  Until that time, I believe the market has unfinished business on the upside, and will become more bearish when either we have struck our upside targets, or have broken support.

1TurnChart
1TurnChart
Avi Gilburt is founder of ElliottWaveTrader.net.