Recent High Is Important For Now

With the market backing off the high we struck yesterday, we still remain below the all-time high struck at the end of last week.  So, for now, I can maintain the wave count as shown.  

In the SPX, I can count a 5-wave initial decline off yesterday’s high.   So, inline with the count as shown, I am assuming that is wave 1 of the c-wave down.  However, clearly, should we break back out over yesterday’s high before breaking below the low then it opens the door to another extension, which can point us to the 6150-85SPX region.

But, for now, as long as we remain below yesterday’s high, I am going to assume we will test at least the 6020SPX region, and potentially even the upper support box noted on the 5-minute chart.

In the meantime, the market is still not acting as though a top to an ending diagonal has been struck.  Therefore, as I mentioned the other day, it increases the potential for the blue count, assuming we begin to break down below upper support before making any higher highs.

In summary, as long as yesterday’s high remains intact, then I am looking for a test of at least the 6020SPX region.  However, should we break out over yesterday’s high, then it opens the door to another extension pointing us towards the 6150-85SPX region. So, we are still going to have to take this one step at a time.