The Purple Path - Market Analysis for Apr 1st, 2025

As it stands right now, we have a break-out over the 5615SPX resistance, but the market is now pulling back from that move.  The initial move through that resistance makes an immediate lower low a lesser likely probability at this time, which now brings forward the purple count to a higher probability.

The question now the market will resolve is how the 1-2 structure in the purple count should be completed.  And, there are two potentials I have placed on the 60-minute ES chart which are both quite reasonable, although I like this current pullback for the bigger wave 2.  Once we see the manner in which we take out today’s high next, that will let us know the applicable micro count, and how we will complete this purple c-wave.

Of course, since we are dealing with a potential [b] wave here in the SPX, I am also considering this may resolve as a triangle, but it is too early to make that determination at this time.  So, I am keeping that potential in the back of my mind for right now.

Moreover, as I outlined in an update yesterday in the trading room, I am still going to track the prior red count, with the assumption that the low we struck yesterday was all of wave 1 down in red.  But, as I also noted, I do not see this as a high probability right now either, as it is hard to substantiate a solid 5 waves down into yesterday’s low.  But, should we see another 5-wave decline back towards the lows, I may have to reconsider that as a 1-2, (1)(2) structure developing to the downside.

The main takeaway from all this is that the red count – however it will wind up completing this [b] wave – is the greater likelihood at this time, at least in my mind.  It means that we are likely setting up a decline towards the 5000SPX region in the coming weeks.  But, the exact path has not yet resolved.  

In order for me to view the move down to the 5000SPX region as a lesser likelihood, the market is going to have to take out the resistance box noted on the 60-minute ES chart, which is not something I am seeing as a high probability at this point in time.  While this c-wave could take us all the way to the top of that resistance box (depending on the 1-2 structure that develops, and the size of the wave 3 in that c-wave), I am not seeing us breaking out through resistance as a high probability at this time.  And, for this reason, I am seeing the path to 5000SPX as the greater probability right now.