SPX: And Mrs. Market says not yet!!

18 thg 5

Well, my previous idea for a higher degree wave 4 got busted! Market is not ready to be bearish just yet. On Friday we got a breakout from the trendline resistance and retest. Next week we should expect a move upwards toward the next resistance at 5402. However, it seems like Market is poised to run towards the 1.236 fib extension of waves AB which is also around the 0.618 fib extension of Primary waves 1 and 2. If the contracting diagonal theory is correct, then that would be an area of interest to see the market turn for a bigger correction. If market decides to blow through those levels, then we need to rethink this whole count and maybe get even more bullish. For now, still looking for a higher degree top and a good 25%-30% correction in the next few months.