The bulls have been doing a wonderful job of making us believers in the rally to 3000 already being in progress. While we have maintained the expectation that the market will likely eclipse the 3000 mark before a 20-30% correction takes hold, the market seems to be suggesting we are on our way to 3000 sooner rather than later.
But, there is one thing that can still cause a detour before we get to 3000. As I have been explaining now for several weeks, the 2823SPX region sticks out like a sore thumb, as it has several calculations pointing to it which suggest the market can drop back down to the 2480SPX region in a more protracted wave (4) before we begin the climb to 3000 in earnest.
Specifically, if the market tops out at 2823SPX, and then drops below 2760SPX in an impulsive manner, I would have to view that as wave 1 down in the red (c) wave of wave (4). That is the one fly I can identify at this time in the bulls current attempt to rally directly to 3000.
Other than the pattern noted above, the current support for the bulls is the 2720/30SPX region, which, if held on this current pullback, would be counted as wave 2 of (iii). Therefore, the next rally through 2800SPX should project us higher in wave 3 of (iii), targeting levels over 2900.
Of course, should the market break out over 2800SPX in the coming week or two, we will certainly continue to raise support levels for stops so that if the market throws something at us which we cannot foresee at this time, then we will be able to stop out and re-align with the market action. This rally has had some very unusual aspects to it that I have highlighted in my updates through the week. Therefore, we have to keep in mind that these peculiarities within the sub-structures are often hints that tell us to still be cautious, as there are other possibilities that may play out such as some form of a diagonal within this final rally over 3000.
So, for the coming week, I will be watching support at 2720/30SPX, and resistance at 2823SPX. And, should we approach 2823SPX before we pullback closer to 2720SPX, then I will be moving support up to 2760SPX, and will continually move support up as the market progresses to 3000.
As we have been saying for quite some time now, we still expect the market to rally to 3000. Our ideal targets for this wave have been a minimum of 3011, with an ideal target of 3225SPX. While I still have no indications that the market is projecting yet to our ideal target, the current structure does suggest we can at least strike 3011. Should the market set us up for a major extension within wave 3 of (iii), that could certainly project us up towards our ideal target.
But, please do keep in mind that once we eclipse 3000 in the SPX, the risks begin to rise, as we will be getting much closer to the long awaited 20-30% correction we expect we will see in the SPX for 2019.