Nothing in the price action of the S&P 500 suggests that the stock market is breaking down yet. The key word, however, is "yet."

The triangle on the S&P 500 that we were watching on Monday broke down into a more protracted move lower in our "alternative" wave count on Tuesday (using Elliott Wave theory). This is worth continued observation. (The S&P 500 closed Tuesday's session at 2065.89.)

It's too soon to declare oneself in the bull camp. One needs to see a better setup or a solid breakout. But that does not mean there isn't the potential for higher highs even in the more bearish wave count scenario.

So, as the S&P 500 has been consolidating, the 2077 area will provide solid resistance. The index is still very much above support.

The overall perspective at this time is rather simple: As long as the S&P 500 remains above 2053, the next target is 2095, with 2082/2085 being the next resistance level on a breakout.

If the index breaches 2053, with follow-through below the 2047 breakout level, however, then it will be heading down to the 2000-2020 support region.

See charts illustrating the wave counts on the S&P 500.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.