Despite The U-Turn, Support Is Still Holding FOR NOW

Well, clearly, I did not expect this immediate decline as my primary view to start the week.  The market had a potential 3^rd wave up in progress as of the close of Friday, and was suggesting we were going to complete waves iii, iv and v potentially this week to complete the 5^th wave higher high.  Yet, the market clearly had other plans.

When I look at the SPX chart, it really does still seem to be missing a 5^th wave higher.  Therefore, until we see a sustained break of support, I have to continue to look for a 5^th wave higher high.

Yet, I do want to point out that the structure we have seen up here as we have been hitting our heads on resistance has taken a very complex turn.   As you can see from the wave count on the 5-minute SPX chart, the market is still potentially within wave 4, but in a very complex w-x-y, wherein even the b-wave of the y-wave provided us with an expanded structure.  This is not terribly common, even amongst complex structures.  Yet, we have to deal with what the market gives us.

At this point in time, I am assuming the market is trying to complete a c-wave of the [y] wave within wave 4.  Therefore, I am still viewing the potential for one more push higher as a reasonable probability. We will need to see an impulsive move through 5590SPX to suggest we have begun the rally for wave 5.

Should we instead see a break-down, then the fact that this structure has taken shape as it has lends a bit greater probability to the blue count at this time.   

Of course, none of this changes the fact that the risk has risen in the market, so caution is still warranted until the market makes it clear that the blue wave structure will be pointing us to 5580SPX as our next target.  Despite my view that the SPX can still push higher one more time, please keep your eyes on the IWM chart, as it is still postured quite bearishly and could push us over the edge if it chooses to follow through.