We MAY Get Much More Complicated

As of today’s close, the market has pushed as far as I can accept for a standard impulsive structure to the downside in the current green count.  Admittedly, we really should not have come this high in a standard structure.  But, that means that, tomorrow, the market must make a strong statement with downside action to keep this potential alive.

However, should it fail to do so, as I warned many times before, it would make the market much more difficult and treacherous over the coming months. Moreover, it would force me to track 3 different structures (while, in truth, I will likely be tracking two more beyond the three I am outlining).  And, clearly, that will not allow for a large degree of confidence in the smaller degree structure.

But, this would then be the point that you will have to focus on the bigger picture more so than the smaller structure.  You will always have to keep in mind that our 5th wave higher off the 2009 lows will likely be targeting the 3500-4100 region.  And, the further down the market drops, the more potential upside you will have in the market.  Moreover, you should consider structuring your account in that way should we have to go down this path.

As you can see, the three structures I will be tracking, in order of probability – at least as I see it – are:

1 – the green ending diagonal on the 60-minute SPX chart

2 -  the yellow (e) wave in the expanding triangle on the daily chart

3 – the wave ii as shown on the 60 minute IWM chart (with the IWM really the only structure I can count a clear 5 waves up off the December 2018 lows.

So, I think tomorrow will be very important for the standard impulsive downside structure which is now present on the 5-minute chart.  Otherwise, we will be moving into a much more difficult environment for the next several months.

5minSPX
5minSPX
60minSPX
60minSPX
1SPXdaily
1SPXdaily
60minIWM
60minIWM
Avi Gilburt is founder of ElliottWaveTrader.net.