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There’s a moment in every wave count where things get a little messy — and how you read that mess determines whether you’re positioned for the right move or caught on the wrong side.
I’ve been working through a structure on the S&P 500 (SPY) that’s been giving me pause, and I want to walk you through exactly what I’m seeing. The difference between a five‑wave impulse and an ABC correction isn’t just academic — it completely changes what happens next.
The initial drop wasn’t very clear, but the retrace looked very A‑ish. I placed the A‑B based on the structure I was seeing — one move, another move, and then one, two, three, four overlaps and five for the C.
When it fits, it ships. That’s Occam’s razor at work — the simplest explanation tends to be the right one.
From the origin point, I’m looking at a potential one, two structure. That drop was vicious. It showed a three, then the overnight action potentially formed a four with one, two, three, four, five. That’s the wave count I’m tracking right now.
At the same time, the broader backdrop has shifted in ways that matter. Something changed in the commodity landscape — almost like a glitch in the matrix that threw the usual relationships off balance.
We’re not in Kansas anymore, and that kind of systemic shift tends to ripple through equities, sentiment and even how certain waves unfold.
Why This Wave Count Has Me Concerned
Here’s the thing that makes me uneasy about this structure…
Corrections don’t take place in five‑wave moves. So what does that leave us with? Either this is a wave one and we do a correction for wave two, or this is an A and we do a correction for a B.
Either way you slice it, the next move would be down after we complete a correction.
Now, it doesn’t have to play out that way. If we don’t make a lower low here, this could be an ABC — just a weird one, two structure — and we go higher. If we stay above this bottom into today, the downside’s probably done. This could be an ABC, not a one, two, three.
The enthusiasm on the downside looks a lot like a three. Could be a C. But what has me most cautious is the way wave four came up without overlapping. If we complete a five down, that sets up a rally back to the wave four region, which is consistent with a B or a two — doesn’t matter which — before continuation lower.
Volatility is also playing its role here. The VIX doesn’t tend to trend — it spikes, then collapses back to baseline. We’ve essentially seen a double spike, and those kinds of moves usually mark emotional extremes rather than the start of a sustained volatility regime.
When you get this pattern of sharp spikes and quick resets, it often aligns with corrective environments rather than clean impulsive expansions, which reinforces the caution in this wave setup.
The Critical Difference Between C‑Waves and Third Waves
At that point, here’s the difference that matters for your trading: If this is a C‑wave, we typically stop at a certain level. If it’s a three, we’ll generally push further, then bounce, then flush again.
Whether it’s an A‑B or a one‑two structure, the implication is similar in the near term — we’re likely looking at another leg down after a correction completes. The longer‑term implications differ, but right now the tactical read is what matters.
This is also why I’m keeping an eye on where capital is flowing within equities. In an environment shaped by structural shifts in commodities and intermittent volatility spikes, leadership matters. I’m leaning toward being long the AI adopters over the AI spenders — the companies using the technology efficiently rather than the ones burning cash to build it.
In markets like this, discipline and leverage tend to separate winners from laggards.
The market is tipping its hand — slowly, messily, but clearly enough if you’re watching the structure. That’s why wave analysis remains my compass. Not because it predicts everything, but because it forces you to understand what each scenario means for price action before it unfolds.
Jeffry Turnmire
Jeffry Turnmire Trading
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I’m just a regular dude in Knoxville, Tennessee: a husband, father, civil engineer, urban farmer, maker and trader.
I’ve been at this trading thing with real money for 20-plus years, and started paper trading over 35 years ago. I have a knack for making some epic predictions that just may very well come true. Why share them? Because I like helping other people — it’s the Eagle Scout in me.
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