I Believe That I Must At Least Consider This Possibility (SPX)

I Believe That I Must At Least Consider This Possibility (SPX)

No, this is not a 'top call'. I'm really not much for calling tops and bottoms. Are we able to project probabilities based on the structure of price? Sure. But in a world of infinite potentialities there are so many paths that can manifest. This being the case, I really do go more for solid setups. The two greatest strengths that I am able to identify for myself in the usage of Elliott Wave Theory with the Fibonacci Pinball overlay are 1) providing market context and 2) solid setups. Yes, there are other methodologies that can do the latter, but I've yet to find one that can identify the first. Let's go to our big picture context and then gain greater granularity with the nearer time frame intervals. 

If we zoom way out to the 2009 low, here is the picture as I am able to identify it. I am always checking and rechecking my assumptions. And, yes, they can change and morph at times if I am able to see something more clearly. But this is the basic premise that I have been following for some time now. The main hits to the structure as shown tend to further clarify the path and its validity. Am I right? Honestly, I cannot positively affirm this either way. But I will say that this structure has given me some excellent setups both up and down. I want to show you some more data points along the way that also reveal solid setups yet again.

This is the daily chart and it shows us a bit more detail as to the hits to the structure as illustrated. Now, to get to the possibility that I must at least consider here. Could it be that an important top is already in place at 6100SPX? The answer, of course, is yes. But that's really not the main point. For someone to proclaim a top or a bottom would still require confirmation. And, this is only revealed ex post facto. So, I can paint the portrait of what it would look like but will leave the positive and negative affirmations for another. Without further preamble, let's get into the more granular view to see our setups.

This time frame will make clear a few key points. To break main support, price will need to take out the 5400 level. And, even if this occurs, it may take it out and then bounce. But that would be one principal indicator that 6100 is at the least a more important high. What else can we glean? The green path just does not seem highly viable given the specific 3 wave move up from support at 5832. This a-b-c bounce was almost too perfect, having reached within less than 3 points of its target and reversing hard to the downside. The bottom line for 6100 being a more important high from this vantage point is that we yet lack confirmation. 

Is there a setup in the near term? Of course. Let's have a look at the parameters. 

There are several possibilities in the micro. And, based on what price does to begin the week we will be able to clarify likelihoods. Let's briefly discuss Orange. Yes, the possibility does exist for an initial 5 down and 3 up as you can see. The 5 down would be a bit of an extreme extension to the 3.618 of the initial 1-2. Yet, it does fit standards, albeit stretched. What if price is indeed in Orange? Then it's also plausible that the next lesser degree wave micro 1 is not yet complete. It could finish at the 5907 area to begin the week before a corrective bounce. 

If we instead start higher to begin the week then micro resistance is ironically at 5997, the exact key support level that was broken to begin Friday's session. Inside infinite possible paths, we must narrow down these possibilities and focus on probabilities. While I do not personally assign percentages to the paths that I project, I do order them primary, alt and even tertiary when needed. Blue is always my primary on the charts that I share. I will tell you that Orange has my attention. Green seems the least likely at the moment. 

Should price take out 6050, then we will have to have a discussion about the path and what shape it may take. For now, as I have been for the last several sessions, I remain in caution mode. It's the setups though that dominate my outlook. Yes, I see the context and have become quite guarded in my long-term approach. However, near term there have been solid setups with low risk entries. Hopefully you have been able to take advantage of them as they come to bear. Enjoy your weekend!