Semiconductors found the bid today and confirmed a long/buy Signal. The Nasdaq is on a long/buy Alert, the Signal will be confirmed with a trade above QQQ 304. The rest of the indexes continue on sell/short Signals.

The 30 minute chart shows the bullish count that the bull market is underway with a minor wave 1,2 minute wave [i],[ii] start. This count is valid above the minute wave [ii] low of 3928. Thus far, the SPX has found support at the volume point of control since the market top last year. Minute wave [iii] is subdividing. Minuette wave (i) is complete and minuette wave (ii) may also be complete. If so, then we should see an impulsive up through the critical bullish level over the next several days.

The alternative bullish count is that the new bull market for the SPX is beginning via a leading diagonal for either minor wave 1 or intermediate wave (1) as labeled below. This is the most intriguing scenario by far. This count is invalid above 4358 as 5>3 above that level. This is worth watching and could somewhat mirror the alternative BTC count that minor wave 2 is playing out. The minute wave [b] of 2 bounce for BTC could coincide with the next leg up in wave 5 for the SPX, then they could both sell off together to complete their respective 2 waves. In both cases, we would see deep retracements of the moves up off the respective primary wave [2] lows. This would create a great deal of fear and suck in a significant bearish presence that would lead to a tremendous bear trap/short squeeze fueling the explosive moves up in wave three for these assets.

Until the Critical Bullish Level highlighted above on the SPY chart is taken out (4325 SPX), this bearish count remains very much alive. This count is looking for a minor wave B of intermediate wave (Y) high. Wave B should now be complete, and if so, then minor wave C should impulse down through the minor wave A low. For now the SPX continues to find support on the volume point of control. The interesting thing about this count is that the minor wave C=A target sits nicely in the 61.8-65% retracement pocket. This count is invalidated with a trade above the intermediate wave (X) high.

At the 38.2% retracement level, there is a chance that the minor wave 2 pullback for BTC is complete. Thus far it has only reached the mid channel line so there is plenty of room to the downside. The lower channel trend line sits at the 61.8% retracement level. We probably won’t get clarity on this until we see the reaction to the non-farm payroll number on Friday. We could see an X wave bounce and then another corrective pattern down to the lower trend line. As noted above, this scenario would fit with the leading diagonal count shown above.