Market Pushes Higher Into Resistance
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Today we saw the market move higher overnight and continue into the end of the day. Unfortunately, the ED and the SPX are trading out slightly different patterns and the lower low that was stuck overnight on the ES is a bit problematic for the yellow count on the SPX. That being said I am still going to allow for that path and as long as the next leg down remains corrective in nature. Should we begin to move down in five waves however then the door will be open to this having put in a larger top and a push to a move under the 5400 level on the SPX.
As shown on the five-minute SPX chart we now have a fairly full pattern into the current levels in the form of an ABC. This move is just under the 61.8 retrace of the initial move down off of the highs and the 171.8 ext of the initial move up off of the lows.
While the pattern on the micro count can count as completed we will need to break under the 5511-5499 zone to give us a signal that we may have put in a local top. If and when that does occur then we will watch the structure of the next leg down to help determine whether we are going to trace out a wave b as shown per the yellow count or if we have potentially topped in a larger wave 2/B shown in red. Once we confirm a top by breaking micro support we can lay out the larger degree of support for the potential wave b but again a five-wave move would open the door for this to have already topped in all of the wave 2/B per that red count.
While today's action is quite strong we are still far form out of the woods in regards to making another higher high and until we can see a corrective retrace followed by a break back over today's HOD I still remain cautious on this to the alongside as our longer term counts still remain quite full.
