Wave iii Could Complete By Tomorrow

With the breakout today through 2475SPX, the market has told us that wave iii has not yet completed.  Moreover, as long as the market holds over the 2474/75SPX region, I still expect us to be able to strike the 2486SPX region for wave iii, and it could complete tomorrow.

Going back to our ideal structure, I am still expecting a wave iv and v to take us higher towards 2500SPX.  However, as I have warned many times, the higher we move into our target box, the higher the risks rise for a multi-month top to be struck.  And, if we strike 2486SPX, then we will have struck the minimum target for wave (3) we set long ago.  So, even though the ideal structure still calls for another iv-v before we top, I am not suggesting anyone trade for that move in an aggressive fashion.

Moreover, as I have noted before as well, I would also not be trading for a potential 4th wave pullback aggressively.  Remember, they often are quite choppy and unpredictable.  They chop up traders quite often, as many who have tried to trade them can attest.

So, while you may want to consider lightening up your long side, or even hedging your portfolio as we move into our long-term target region, remember that the next drop will likely be another buying opportunity for a rally up towards the 2600SPX region, taking us into 2018.

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Avi Gilburt is founder of ElliottWaveTrader.net.