The preferred primary count is that Minute [i] of 5 of (5) topped yesterday and today wave Minute [ii] pullback which either is over or will be soon with another move below today’s low.
Overall sentiment-wise there is a high degree of “bearish market watching” where everyone from GS to my grandmother is looking for the bottom to fall out. There is certainly good reason for this as market internals are historically the worst there ever was in so many ways indicating a major peak is forming. It’s being reported commonly on places like YAHOO! Finance and MarketWatch. So, I believe they might be a month early, get tired of reporting it, get bullish again because prices keep going up – and THEN the bottom falls out after a historic IPO, another rigged election and whatever.
Zooming out a little it would look like this (see next chart below). And the key pivot support is where Minor 4 is marked: 7616 SPX. In fact, it really shouldn’t get too close to that.
The real place to watch is SPX 7700, the top of the open gap in Minute [i] of 5 up. If prices drop back into the large open gap, the count is likely over. That would be a decent entry place to add shorts. This is not investment advice; it’s just a logical entry point based on the Elliott Wave structure. Why? because 7700 or so is where prices would begin to invade the price area of Minor 3 up and indicate a major downturn that the overall pattern has changed to down.
But again, the primary count is that Minute [ii] of 5 settles somewhere higher, perhaps the low today is sufficient (as marked) as it bounced off the top of the triangle upper line. So yeah, tomorrow will be an interesting day.
The market must go up…
There is another interesting potential squiggle count in play: The ending diagonal triangle, megaphone pattern. Yesterday’s peak wave [v] = wave [i] in points.
But I prefer a further rally, perhaps toward the election day and/or Anthropic’s IPO in early November. It would only be fitting that the world’s biggest bubble – the AI bubble – will peak with the dumping of one of its champion losers onto the public.
The DJIA supports this. It could be Minor wave 1 down is finished and Minor wave 2 up – a retrace – is just beginning. This would imply the SPX finishes out its Minor wave 5 up.
So that’s the preferred counts.
