Must See A Bottom To Keep Green Alive

There really is not much more room I am going to give the green count at this time.  We are now hitting lower lows as outlined in my last updates, and the market has a positive divergence set up on the 60-minute chart again.   Will it hold the divergence and support?   Well, again, I cannot tell you that answer.  But, I can tell you that if it is going to hold the green count, this is generally the last region I can view as holding for that count to remain viable for me.

Alternatively, should we continue lower in a sustained break of the 5495SPX region, then I am going to be forced to move into the red count, which suggests the top is in, with the yellow count then becoming my alternative.  And, even in the yellow count, we would likely see an b-wave bounce, followed by a c-wave decline.   I have outlined this in my live video yesterday, which I strongly urge everyone to view.

Also, while the 60-minute MACD has a positive divergence set up again, the MACD on the daily chart is exceptionally oversold.  Should the market hold this support, then the reversal can be quite strong.  We will first need to get over 5598, and then move through the downtrend channel noted on the 5-minute SPX chart.  We will then have to content with the major resistance box noted for the alt [b] wave in red.  Remember, should we see a 5-wave decline from that resistance, we will have to switch gears and look for a decline down to the 5000SPX region in the [c] wave in red.  

So, in summary, the green count is about to run out of room and I will have a hard time substantiating it if we see a sustained break down of the 5495SPX region.  Remember, we can see a spike below it, and then strong reversal, which is quite common in these types of set ups, and I would consider that as holding the green wave count support.

So, parameters are set.   It’s now time for the market to either provide us with a strong reversal, or the probabilities will begin shifting in the market, as I outlined the other day.