SPX Update: Happy Fifth of July

I hope everyone had a reasonably safe Fourth of July and enjoyed the fireworks displays in the dollar index and the E-mini S&P futures.

I'm just going to do a brief update today, because we're still in the zone where the waves are a bit unclear at several trend degrees, and I feel like most of what I can offer at this point (as far as wave counts go) largely amounts to speculation.  The hourly chart mainly highlights the next resistance areas.  There's important resistance in the 1630-35 zone.

Below is one possible wave count, though there are about 10 million options right now.  The bottom line with this chart is that bears don't want to see the market sustain trade above the upper blue trend line.  If this count is in the ballpark, then one more tag of that trend line would be ideal for a top in this wave.  We just have to be careful, because again, since the count is vague at another degree of trend, we don't want to fall into the "just one more wave up left!" trap for perpetuity. 

In conclusion, I'm still inclined to think the odds favor new lows after this rally -- at the minimum, I'd really like to see a retest of the 1570-80 zone.  But there's no guarantee that will happen -- we are still in a Fed-driven market, and it doesn't always behave the way you'd expect.  I would continue to recommend only the lowest risk entries as a result -- so far, this isn't the type of wave one can afford to chase and/or jump into a position with abandon.  1630-1635 is next important resistance.  Hopefully, Friday's session will offer a bit more info for the weekend outlook.  Trade safe.