Back on 6/22, I noted that I had some concern that the high at 3155 was not a "clean" high, which suggested the possibility that it might be the b-wave of an expanded flat, and that has since proven out.
For a quick refresher on expanded flats -- which are one of the key patterns to learn to spot via Elliott Wave Theory, because the Fed market since 2009 has loved them -- see below:
SPX is now retesting the June high, which means if bears want any shot of this being wave 2 instead of wave B, they need to make a stand directly. Worth noting that if SPX breaks the June high and THEN reverses, we're likely looking at a larger degree expanded flat, with the new prevailing high marking wave B of said flat. That would mean any pending C-wave decline would ultimately be another buy op. But first things first, of course.
Also worth noting that in the event SPX breaks the June high with increasing momentum, then the most bullish pattern would have the rally from 2965 to 3153 as wave 1, the decline to 2999 as wave 2, and wave 3 underway now (likely to head toward ~3300) -- so bears do need to maintain a modicum of caution if there's a sustained breakout.
Once again, first things first; but it always pays to understand both sides of the trade.
In conclusion, in a perfect world (for bears and for the preferred count) SPX would complete B/2 soon, possibly nearly immediately upon today's open. Trade safe.
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