The failure yesterday for the market to lose support after the gap up was fully retraced back down in the first hour tells me we have likely not topped yet. I now see the first ABC down from the 6333 high on 7/3 to the 6246 low on 7/7 as (possibly?) completing some smaller degree wave 4, and NOT just an A wave of a bigger ABC down that would pullback to 6200 or so.
I just feel that if that was going to happen yesterday was the day to start it. That gap up and squeeze would have been (should have been) the B wave and the C wave down would follow. It's not as likely to happen now as the momentum is gone. That early pop and drop should have been used to break support around 6275 or so, but it held and the rest of the day we saw the market grind higher into the close.
It's still possible I guess for that to play out, as the quick early pullback might still be the wave 1 down inside the C wave, and the retrace back up to within a hair of a new high could be the wave 2... and if so, the wave 3 down might happen today (and wave 4 and 5 to end the C wave).
But it's not looking like it wants to break support the way it acts. If it does, I'd ONLY look for a slightly lower low then the 6246 low on 7/7 (my 6200 original target), and it should be short lived. But if it doesn't happen I have to think we are already in a wave 5 up to 6350-6370, and that it should be hit some time next week (probably before the CPI on 7/15).
That suggests a top next Monday possibly. There's not any real difference with the end result for topping early next week for either wave count. If we do the C wave down today to 6200 or so then the ABC will be from 7/3 to 7/10 instead of 7/3 to 7/7, with the shorter one just having that one ABC move inside it and a higher low of 6246, with the longer ABC down have a lower low and it would have an ABC (A), ABC (B), and ABC (C) to complete it.
Both will be followed by a rally up into early next week. Either one could make a higher high or lower high, and then we should get a much deeper pullback afterwards into the rest of next week and the week afterward. If the market would have sold off this week then we would see a strong rally next week so all the "puts" will expire since it's the monthly OPEX week.
But since it's looking more likely that this will will hold this upper range it's probably going to close at a high area, and that means OPEX will need to kill all the "calls" so they expire worthless. That means we should pullback later next week but go into it at a high. For today, I don't think we pullback much as I think yesterday base zone around 6275 will still hold, and therefore the odds of breaking it for a move to 6200 seem low.
Regardless of where it pulls back to we should continue holding this zone so that one last move up to 6350-6370 can be made early next week. Then we get a nice pullback.
Have an blessed day.
