The wave counting has been ugly. The trading even worse. One question to ask is how nasty will this market be in the short run? Yes, price can still certainly go upward to finish a fifth wave of an (a) wave up on Monday. But the question has to be asked, "what if it doesn't?" What if price goes down before it goes up? Below is a very nasty alternate count in the hourly SPY cash contract.
The gist of the count is that it's possible for the minute fourth wave to extend a bit in time, break some upward trend lines in the process, and temporarily getting people more bearish. We do not know it will. We can only suggest this alternate might be in play IFF the overlap warning signal is fired off before a new high is made. In other words it is possible there is a (c) wave down to follow after what might be a failure flat (b) wave up.
It's something to watch. It was brought about by the Payroll Report wave being very deep and making one overlap, by the failure of the SPY to make a new high above the prior high, and the lack of a solid impulse to end the day today.
So keep an eye on it. Don't let it rule the roost unless the signals fire off. Meanwhile be flexible, patient and calm. The market will re-establish a trend direction at some point. Right now, price is fighting with the 18-day SMA, and the Smart Money needs to be sure things are good & confusing.
Have an excellent start to the evening and the long weekend if you are celebrating,
TraderJoe
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