The S&P 500 counts well as an expanded flat correction from the May 20th low. Despite numerous efforts to pinpoint the precise high, there’s not much I can do other than point out places where it can stop, and this is one of them. The cash session is just a few points away from an excellent fib relationship here between the late May rally and this rally. We are just beneath the 200-day SMA and it’s virtually impossible for me to believe we will not see a reaction from that here.
This is just one way we can count things, but since we’ve broken yesterday’s high (which I discussed here) offsetting the Orange B-Wave as I did in that post is less suitable. That count also did look a bit forced, but I needed something in mind in case we dropped from those levels. This, on the other hand, looks nice and natural.
So, I will use this for now. I have no appetite whatsoever for longs here and remain solely in puts for the time being.
I can’t rule out that we won’t still go up to a higher fib (as discussed here), but given the unexpected small gap down yesterday (discussed here) I have been inclined to think we are closer to the top than I was when I wrote about the 2:1 fib on the evening of the 12th.
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