Option Investor
Update
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Using an uptrend line along the highs on Tuesday and yesterday and then attaching a parallel line to the low on Wednesday gives us a potential up-channel that price should stay inside if we're to get a 5-wave move up from Monday's low. SPX is now threatening to drop out of the up-channel, the bottom of which is being tested now near 828. A break down from here would give us our first bearish signal.

Confirmation of the more immediately bearish dark red wave count on the 30-min chart would be a break below Tuesday's 810.48 high. That would point towards the larger leg down to the 750-760 area before potentially setting up a stronger rally. The pink wave count is looking for a 5th wave for the rally off Monday's low and that's why I'm watching the parallel up-channel. It says we could see another rally leg up to about 857 where the 1st and 5th waves would be equal.

SPX 30-min chart:
[Image 1]

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