Bears Have Oppportunity - Market Analysis for Nov 15th, 2024

With the drop below our pivot, the market may begin to suggest a top could be in place. 

Remember, if the market is presenting us with a standard Fibonacci Pinball pattern, should we see a sustained break down below the .618 extension within that structure it usually is an early tell that the standard Fib Pinball pattern will not follow through as standards suggest.

Today we have dropped below that support.  Moreover, from a technical basis, we also broke into wave [1] territory, so the structure that I was tracking has officially invalidated.  So, I will no longer be presenting that pattern on the 5-minute chart, as it has technically invalidated per the count I have been presenting.  This now had me personally stop out of the SPY longs I entered the other week.

For me, personally, unless I have a strongly reliable wave pattern that follows Fibonacci Pinball, I will usually not trade it with my own money.

In the meantime, this does not mean that a top has been certainly struck.  But, it does increase the probabilities of such.

This now has me moving back to the potential ending diagonal structure I was considering the other week as an alternative count - as I simply cannot maintain a primary count by relying upon an ending diagonal structure.  Again, this means I am now viewing the top as being in, unless I see something that will change my mind.  But, I want to be VERY clear as I am still not shorting the market aggressively, nor do I suggest it by most of you YET.

As far as the potential diagonal, I am showing it on the 60-minute chart below.  This now changes our parameters for confirmation a little. As you can see from the 60-minute chart, I have added a blue box of support below for wave iv, the bottom of which is 5560SPX.  The reason I am using this box is because we often see overlap between waves i and iv in a diagonal,.  And, this allows for that.  Moreover, since we topped at the 1.236 extension of that ending diagonal structure so far - which is the typical target for wave iii in a diagonal - it is not unreasonable to see support for wave iv in the .618 extension within that diagonal, which also provides us with overlap.  That is the lower end of the support box of blue iv. 

And, if that box holds, then we still have a target of the 6273-6377 (the 1.618-1.764 extensions of blue i-ii) which is the typical target for a 5th wave in an ending diagonal.

I want to also make a point of the bigger picture again.   The market has become exceedingly difficult as we move towards a major top.  The waves have been coming in 3-wave structures, which certainly adds to the complexity of analyzing a topping structure.  And, since it does not provide us with a CLEAR 5-wave structure into a high, it does force us into becoming much more conservative in being able to confirm a top being struck.  It is for this reason that I have to allow larger swings when outlining support in the bigger picture before I can see it as a high probability that a top has indeed been struck.

But, for now, I am going to view the top as being in as my primary count for risk management purposes.  But, it means that I am leaving the door open for another 3-wave rally to still take us to the 6273-6377SPX region.  And, it is for this reason that I am not yet ready to aggressively short this market yet.