Still Watching 804.30

The cash S&P500 made a slightly higher high on Thursday before ending down. This keeps us all guessing as to whether we will exceed the 804.30 level.

At this point the market has respected the Fibonacci cluster adjacent to the wave i’ low (804.3) and the downtrend line drawn from the start of the proposed Elliott pattern across the ending point of wave ii’.

However, price action still remains within the recent upward regression channel shown in today’s chart. If weakness continues we will want to start seeing signs that the wave up from March 6 is complete. Breaking out of the channel is one such sign. A move below 749.93 would be proof (that is the current PRP trend change marker).

Any break of 804.30 and the alternate wave count discussed Wednesday becomes the new roadmap. Elliott is the roadmap used to map how we get from one point to another. The destination right now (next Level 5 PRP) is a new low (below 666) before a potentially large multi-month rally can unfold in equities.

At this point I am in a waiting mode. With a bearish bias I wouldn’t even think about the short side until 749.93 is broken.