Setting Up For Another Push Higher
By
Avi Gilburt
With the market rallying yesterday and into the overnight hours, there is enough of a pattern in place that I cannot completely rule out the yellow count at this time. So, for now, it will remain on the chart as an alternative.
But, let’s now discuss what we can see in the coming day or so to either confirm or invalidate that potential.
I have notated the attached 5-minute ES chart with the paths I am tracking, as it has all the waves that we have seen off the low in the market, whereas we are missing some of that movement in the cash SPX. So, let’s focus on that for now.
I am going to assume that a low has been struck for the pullback today. And, that pullback is either the red b-wave, or the alt 2 in yellow. Assuming the bottom is indeed in place, then I am expecting a rally through the pivot noted on the chart. And, once the market gets to the 1.00 extension in the 5947ES region, the market will have a decision to make.
This is based upon our Fibonacci Pinball structure. Should the market pullback correctively and hold the pivot as support and then continue back over the 1.00 extension or the high struck in the rally through the pivot, then that makes it likely we will have to move to the alternative yellow count. However, if the red count will remain our primary, then the rally to the 1.00 extension will then be followed by a break down below the pivot, pointing us to the target/support box below presented on the 5-minute SPX chart. And, since the wave 3 in the red count did not reach the 1.236 extension, I am considering that the 5th wave can bottom at the 1.618 extension of waves 1-2, which is the top of that support box.
While it is possible that today’s high represents all of the wave 4 in red, I have to note that it does seem rather small in proportion to be all of the wave 4. But, if we break down below yesterday’s low, then I have to assume we are in wave 5 whether we see that rally to 5947ES or not.
In the meantime, I want to remind you that if we do get that 5th wave, it will likely present many of you with a buying opportunity as it will likely suggest that an a-b-c correction has completed, and a reversal is to be expected. Whether that reversal turns out to be a [b] wave, or whether it turns out to be the alt v in blue is yet to be determined. But, a 5-wave decline completed will suggest that we should expect a reversal. So, that is what I am going to be expecting if we can get that 5th wave lower low.
