Let Us Discuss One Important Level Above

Let us suppose that we really, really want this to be a bear market rally, lol. As discussed earlier, if so, then we need this rally to be composed of 3-waves, with wave balance. We lack that balance here, but let’s look above us to see what we may see. (And let’s forget about the important moving averages we are above). (And let’s forget about the good looking Wyckoff accumulation). Heh.

Let’s face it: retail flows are strong here, and that can’t be good, ha?

Ok, we have a 2:1 balance up above us at 4339.54:

SPX

Now, we should also have internal balance, too. This Orange C wave (of Pink B) certainly looks like an impulse, so let’s label it that way, like this:

SPX

There are two ways we would like to see these blue waves balance. 1) We want a relationship between blue 1 and blue 3, and blue 1 and blue 5, and 2) We need to be careful because blue 1 is very long, and is longer than blue 3, and blue 3 cannot be the shortest, so blue 5 cannot be longer than blue 3. It’s one of only 3 hard rules. Not negotiable. Just about everything else we can dick around with, but not that.

We have already established that blue 3 equals 78.6% the length of blue 1 (green Arrow):

SPX

So what if blue 5 is also only 78.6% of blue 1? (Or just shy of it?) That happens at 4340.72:

SPX

There’s nothing wrong with blue 5 equalling blue 3; we just don’t want it to be longer. And if it falls just short of it at 4339.54 (from the very first chart above), then we would have all the wave balance we would need at that level, both internally and externally to justify a top.

And it could just do something like this (rally some more, consolidate, poke above and then poop):

SPX

Sound good? That’s my plan for next week, I think. If that holds, the basic outline of the “Roadmap” would still be intact (though we’ll have gone almost hundred and fifty points higher than anticipated), and I will need to recalculate a new projected low, but I will wait to do that. We have plenty of time to plan for that (and if we do fail, it will still be way, way down there around 3000).

In sum, there is still some hope for the bears.


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