Bulls Still Maintain Control Of The Market

The rally off yesterday’s low has now given us a potential 5 waves up off that low.   And, if you remember, the general target for i of [3] is the .382-.618 extensions of waves [1][2].  With the .382 extension at 5774SPX, as represented by the green line labeled 38.20% on the 5-minute SPX chart, we have reached our minimum expectation for wave i of [3] with this rally.  

However, we are also hovering just below the yellow .500 retracement of the [a] wave.  Moreover, there is an interpretation, as I am showing in yellow, which can count this 5-wave rally as the c-wave of the [b] wave.  But, I do want to note that this is the most bearish count I can come up with on the SPX right now.  Therefore, in order for me to consider adopting this count we would need to see a CLEAR 5-wave decline once this 5-wave rally completes.  Furthermore, a break-down below this week’s low will make this a much higher probability.

For now, the next pullback is going to be the key.  As long as the next pullback is clearly corrective, then the bulls remain in control.  And, one can choose to buy that corrective pullback and place a stop at the wave [2] low.

But, since this potential wave i in the bullish count is this small, we will still have to contend with the micro pivot overhead as our next test for the bulls.   Once we are through that micro pivot, it will then become support for the next move to 6153-6235 which is our target for wave 3.

So, for now, the bulls maintain control of the market as long as the next pullback is clearly corrective, and we hold over this week’s low.   So, for anyone looking for a long trade, that is the risk you run for any long trade attempt.