Back on Track - Market Analysis for Nov 21st, 2013

Another stick save by the bulls today. This is exactly what we were hoping for, and why I suggested caution about calling a top in place already. For a local top to be in place already, the downside count is now limited to only a leading diagonal, which means a greatly reduced probability of playing out. Even so, as I have recommended before, trading this last bit of potential upside long in a big way is not attractive. We are still on track to complete a full 5 waves off the October low, which should lead to a larger pullback of some kind, likely back to at least the low 1700's. 

Concerning the micro count, the structure off yesterday's low is not entirely clear, so I cannot offer a reliable chart. However, the 1805 - 1810 target above still stands, with the potential for extensions to 1824. Please be mindful of your risk versus reward on the positions you are still holding if we move into this area. Aggressive traders can consider shorting this area, and more conservative traders should wait for an initial 5 waves off the high before shorting.

Garrett Patten is a senior analyst at ElliottWaveTrader covering both U.S. and international equity indices as well as stocks.