The Two Questions at Hand

The two questions at hand, it seems to me are:

  1. Are the markets bullish or bearish? I.e., have we completed the correction, or no?
  2. Where are we in those structures if we are one or the other?

I cannot get over the fact that $SPY looks to have generated a triangle while coming off the 9/30 low (green arrow). If so, we should be in a correction “up,” i.e., we will turn lower again and challenge the 9/30 low. If this “we’re in a b-wave” scenario is true, then from that triangle, we need to make a 5-wave move up (that’s the “c of b,” which needs to be 5 waves). There are two options: the 5 waves are done, or they’re not. If they’re not, it might look like this:

SPY

If they are done, it might look like this:

SPY

Both seem reasonable to me.

On $DIA, a better case can be made that it is complete because we have a clearer set of three peaks to make the 5-wave move (and notice the nice triangle here, too):

DIA

Now, I could also be completely wrong here, and the 9/30 low could be one and done. If that’s the case, then we will need to count that triangle as a “2.” If we do that, we get something like this (or a few other variations are possible):

SPY

But perhaps even in this case, we should still be looking for a local high, at a minimum, as, once that pattern completes, it should retrace ideally to the orange box. I like the triangle, I think we’re in a minute (blue) b wave, more than I think we’re in a minute 1. But, in the permabid market that so rarely enters pullbacks of any magnitude, I can imagine myself turning out to be completely wrong about this.

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