Probing among my wave counts

I am probing through my different wave counts in the markets and still, there are a few alternatives, why should it be easy? 🙂

Starting with the US and the S&P 500 yesterday saw price action according to what I thought. The first long-term primary count is the triangle as shown below.

The first alternative is a continued correction and then a larger breakdown.

The second alternative is more negative and would call for a top right here in the bounce.

The third alternative is a lot more bullish.

So, we have four good possible counts, what do I do with them?

Well, I go down to the very short term view and monitor for some confirmation of the various counts.

Primary count for S&P 500

The primary count was looking for a short-term top yesterday and a correction down in wave-(X). The market is looking down sharply overnight and suggests an opening around the 38.2 % retracement level so if the market gets some legs from there after the open then this wave count is very much in play and I would be looking to establish some Bull Call Spreads to take advantage of this.

If the S&P 500 breaks 2606 I will instead be looking for a more bearish wave count like alternative 2.

An interesting US stock that I have been trading from the short side is DowDuPont (DWDP) where I think that a top could be in the making and a Bear Put Spread could be in order or a Bear Credit Call Spread in order to cash in on some volatility premium.

Looking at Europe and Eurostoxx 50 the counts are a bit more difficult but I am looking for the count below to pan out.

Today should be a VERY interesting day so stay tuned.

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