SPX No Longer Rangebound

Today the market opened up flat consolidated most of the day and then broke higher in the afternoon session. A very similar pattern to what we have been seeing over the past several session. Today we are now re-testing the all-time highs on the SPX thus invalidating the potential 1-2 setup that was in place to the downside and thus putting us in the wave v up off of the 7/18 low. Bigger picture the larger degree topping count is still intact at this point in time with overhead resistance coming in at the 3023-3045 zone.

The initial signal of a top now comes in with a break of the 2974 low with further confirmation coming with a break of the 2951 level. Although not required given where we are in the larger degree count seeing a full five-wave move back to the downside would also help give additional confirmation of a top. Furthermore, because we are likely forming an ending diagonal top in this region the reversal back down should be rather sharp. Failure to see a sharp reversal would certainly be a warning sign that something else may indeed be in play. 

So while the signs at this point are still pointing towards this forming a larger degree top until we get some confirmation that this top has indeed been struck this still can continue to grind higher deeper into the resistance zone overhead. 

SPX  60
SPX 60
SPX 10
SPX 10
Michael Golembesky is a senior analyst at ElliottWaveTrader covering Forex, the S&P 500 and the VIX. He contributes frequently to Avi's Market Alerts service at EWT while also hosting his own VIX Trade Alerts service and co-hosting the EWT Forex service.