Suggestions

Today, on the SPY hourly timeframe we were watching the Fibonacci 162% external retracement on the three-wave down wave that occurred on 16 July. It's the upper red line on the chart shown. Prices over-ran it slightly but nothing to be very concerned about yet. The SPY Cash 1-Hr chart is below.

SPY Cash - 1 Hr - Some Suggestions

There were two possible indications of a top: First, the potential extended fifth wave of c/iii with this wave shorter than a/i. Second, there appeared to be a diagonal forming that we counted in real time. So, the current up count, if it holds could be a,b,c to a (b)-3 wave. Such a (b)-3 wave could be for an expanded Flat or a triangle.

But we don't know upward movement is over. There are still no downward overlaps, nor the undercutting of any significant lows, yet.

So, watching the trend line sketched in, if prices respect it and make a higher high, we will probably conclude there are five-waves-up at that point, and configure the count with Minor A at the new high.

If, on-the-other hand prices breakdown significantly, and perhaps back-test the trend line and fail, then we could likely be in either an expanded flat or triangle scenario. These are very testy waves at this point, and we must just count what we see going forward. At least we have some ideas of the like possibilities.

Have an excellent start to the evening,

TraderJoe