B Wave Held Where It Needed To
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Today, we saw the market continue its move higher into b-wave territory, only to turn down right at key resistance and push lower into the afternoon session. As it stands, we now have what appears to be a fairly clean three-wave move up off last week’s low, giving us an early indication that a top may have been struck in this b-wave.
That said, we still need further confirmation. Specifically, we want to see a break of the key support levels I outlined yesterday to strengthen the case that wave b has indeed completed.
From here, the next steps for confirmation are a break of the 6283 level, followed by a move below last week’s low at 6237. Should we see follow-through beneath that region, the next key support/pivot zone comes in at 6241–6152 on the ES. A sustained move through that zone would provide stronger evidence that a larger-degree top is likely in place.
For the SPX, the larger-degree support resides in the 6064–5929 region. A breakdown below that level would further confirm that a more significant top has been completed.
However, if ES can instead see a sustained breakout through the 6418 resistance level, that would reopen the door for a push higher toward the 6527 region. Still, with what now looks like a fairly clear three-wave structure off the lows, the probabilities for that bullish extension have been reduced.
