I Wish I Could Be More Certain Here

I focus on counting waves on the futures because we generally get better waves there, but I want to make an observation on cash $SPY.

On $ES, my primary count is a bullish one, but we still need to go higher to gain greater confidence in it. We remain within the bull flag, and even a small breakout can fail (that’s what bull traps are).

The bear alt I provided this morning remains alive and well and I was hoping it would lose credibility today if we actually broke out of this flag.

But, looking at $SPY, I note that we’re really at a special spot. The whole move up (in cash) from the low on the 10th looks like a 3-wave corrective move. That center chop fest looks (and felt) like a “B-Wave.” The bullish count needs that to be a two, and it doesn’t really look like one. That doesn’t mean it isn’t one, but these fibs we’re at are interesting:

  1. We’re at equal legs now between minuette (orange) c and a.
  2. The whole rally from the low on the 10th has come precisely to the 61.8% retracement of the whole decline from the top, exactly where we would want to see a b wave come to (on my count, the minute [blue] b).

So, I have to give almost perfectly equal weight to these two counts now. I wish I had something stronger for you, but I seriously think it could go either way right here. There’s a small part of me that wants to give the bear count a higher probability here, but I am bearish by nature, and I’m not sure if that bias is clouding the judgement here. That bias has caused me harm in the past, but it has also protected me: I have never been caught in a serious bull trap either, so yin meets yang.

SPY


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