This trade setup was most frustrating part of trading $spy and the lesson learned is to wait for setups to develop. Here is is the evolution of the setup in the days leading starting on the 25thof July.
On the 1 hr time frame the top of yellow (iii) is reached and at that time it looked like the top of5 since I was expecting the ABC from December low to terminate at the trend line that started in March of 2019 not realizing it indeed was still part of larger degree wave 3.Since the purple 1 counted as a nice 5 wave move on a 5 min T Frame i went on putting in trades looking for a 2 wave termination in a abc fashion around 61.8% retracementand got taken for a ride with loos as that wave moved higher up setting a new high at $302.23 and now i am completly off my count and took that as the new high and that the yellow iii and iv were actually a and b and now the purple 1 is actually c and the end of the correction had come to an end.
Now on 7/29 I am thinking that we have to go down in abc to finish 2 on the downside and took short positions. To my disbelief turned out to be a abc to the upside and the trend line drawn from top of (my at the time wave 1) was bouncing off the trendline support and I professed that the 2 had come to an end and wave 3 was in the making after hours.
on 7/30 the pre-market drop in the morning set things in the right track that the actual yellow v in the larger degree is not over and it indeed looks like the termination point of this larger degree wave is at the top at around $305 where the trend line meets to make this whole wave starting in march of 2018 to end in an expanding triangle.