Cash Up Wave Even Less Impulsive

In yesterday's post, we provided reasons why we did not think the waves made on the holiday shortened week were impulsive. That being the case, even we were surprised (a tad) when Friday's up day could not also result in follow-through on Monday. The market was lower at the open, and followed through lower near the end of the day with a lower low. A truncation top is possible on Friday's high.

SPY Cash - 30 Min - Possible Truncation Top

In the process of making the lower low later in the day, price overlapped the prior a wave up, making a further impulse count up very difficult. As a result, we assigned the first low as micro wave ((1)), down. There was definitely a three-wave sequence up following the first down wave, shown as a :3 which could be a tentative wave ((2)) location. Meanwhile, the afternoon down wave looks like a :5 but can also be interpreted as a :3. So, it is best to see if a Flat wave is forming or not. Watch to see if 3,883.25 is exceeded in the overnight or tomorrow.

Needless to say, the weakness might well represent starting a minute ((iii)) wave of a Minor 3 wave down, but better evidence (price-length vs time-speed) is needed.

Have a good start to the evening.

TraderJoe