Is This A Big Fakeout?

However, I will note that should the next drop below 2385SPX be corrective in nature, and then we rally through the high we make in this rally, I will likely move into the alternative count in yellow, which points us to the 2500SPX region sooner than I had preferred. The reason I say we have to break 2385SPX is because that is the .382 retracement of what can be a 3rd wave top at today’s highs, so I would first want to see the market break below that region to suggest we still do not see a 4-5 to complete a bigger (c) wave up here, which can then take us until the end of this week.

So, for now, I am still looking for a bigger downside reaction in this larger 4th wave. However, as I have stated many times before, you MUST respect the fact that this is a bull market. Therefore, downside set ups are not for aggressively shorting for most people – at least in my humble opinion – but, rather, are times to consider where and what you want to be buying on the dip. 

Remember, the strongest likelihood and highest probability perspective we see on these charts right now is the rally to the 2500SPX region. But, what we still struggle with is from where we begin that rally. And, as I have noted many times before, knowing where a 4th wave has completed when it is not a textbook 4th wave is often one of the hardest things we do when it comes to Elliott Wave analysis.

See charts illustrating the wave counts on the S&P 500 at https://www.elliottwavetrader.net/scharts/Charts-on-S-P-INX-201705231587.html.

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Avi Gilburt is a widely followed Elliott Wave technical analyst and author of ElliottWaveTrader.net ( more

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Chee Hin Teh 4 years ago Member's comment

Thanks for sharing