Bulls Are Still Dancing Around That Last Chair As The Music Continues


I want to start out this update with warning again that we have not yet broken any support.  And, until we do, you should consider holstering any bearishness.

Nonetheless, I have to say that today’s action in the futures is very overlapping and uncertain, even for a diagonal structure.  Yet, as I just noted, we have not broken any support.  

The one chart that came close to breaking support today was the IWM.  Off the recent high, I can outline an a=c decline into the 203 region today.  That could indicate a corrective 3-wave pullback – if we hold 203 – which can open the door to one more push higher.  So, until we actually see a sustained break of that level, the IWM has opened the door for one more push higher in this ending diagonal.  Should we see a sustained break of 203, then we will have to assess how the decline takes shape.  Remember that we need a 5-wave decline towards the 194 region to suggest a major top has been struck, and that a 25%+ decline can still take shape this year.

So, in the SPX, a breakdown below 5056SPX is still the first strong warning signal that a major top has been struck.  And, until such time, the market still has a path – an ugly one though – pointing to 5350SPX.  

5minSPX
5minSPX
60-minSPX
60-minSPX
IWM60min
IWM60min
Avi Gilburt is founder of ElliottWaveTrader.net.


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