One Chance

The S&P500 first had another small gap up this morning - which filled - traded slightly lower and then started making higher highs which were not matched by the Dow Jones Industrials. Then, in the mid-afternoon, when the President said he did not tape former FBI Director James Comey, and the text of the health bill in the Senate was released, the market started trading lower, and almost broke the current wave ((iv)) lows, but not quite.

SP500 2-Hr Chart - Higher then Lower Today

This 'can' be (a), up, and (b) down within ((v)) - as the primary count. But then the lows must hold, and they are at high risk of breaking.  The alternate would be that the current location of ((iv)) is just (a) of ((iv)), and today was (b) of ((iv)). If so, then in no case could a (c) wave of ((iv)), lower, break the 2425 level lower because wave ((iv)) of the diagonal would become longer than wave ((ii)) and that is not allowed in a contracting diagonal.

If 2025 is exceeded lower, the number of upward options begins to narrow dramatically, but I will only discuss that should it occur. Regardless, it should be clear that momentum is being literally sucked out of this market, and volumes are already running "summer light". There is uncertainty in whether the market has already topped (it would be in the thrust out of the triangle shown in earlier posts). Therefore, I remain neutral and just counting waves until we see what formation and measurements occur.

The NQ futures traded above their daily 18-day SMA or "line in the sand", but closed below that level. So, their bias is currently still down. And, the Dow Transports have still not confirmed the latest all time higher highs in the Industrial Average.

Cheers! And have a good evening.
TraderJoe