Wave 5 In Progress

Yesterday afternoon, before the market spiked down to its lows, I narrowed my support box in an alert I sent out to the full-time members:

“I am going to narrow down our micro support up here to the box as shown.   But, as long as we hold the 5568SPX region, which is the w=y, then I am looking directly higher for wave 5.   5536SPX is the bottom of this support box, and we would need to take that support out resoundingly for me to reconsider one more push higher in this structure for the [c] wave rally.”

So, now, with the market holding support yesterday, we have a nice rally that has taken shape today off that support, which I am counting as wave i of wave 5 in both the SPX and the NQ.  Clearly, that means that yesterday’s low is an important low which should hold on the next pullback.  And, as long as see a corrective pullback in the coming day or so which holds over yesterday’s low, we seem to be projecting to the top of the box in both the NQ and the SPX.

What is also interesting about the shallow-ness of this wave 4 in SPX is that this low will signal when the b-wave or wave 1 decline has likely begun.  When we break down below yesterday’s low, we will then be able to begin determining whether that decline is corrective or impulsive.   And, as we know, an impulsive decline will likely indicate a major top is potentially in place, whereas a corrective decline is going to point us higher in the coming months.

So, it would now seem that September is going to be the important month.