Bullish Scenario Needs a Stick Save
By
Today, we saw the market open higher and continue to grind higher into the afternoon session, only to be rejected right at the 61.8% retrace of the move down off the highs. We are currently testing a key micro pivot that, if broken, would exhaust any reasonably probable bullish scenario that I could see that would take this to new highs before breaking back under yesterday’s low. So, as of the time of this writing, we are at a very key inflection/pivot level, which, if broken, will clearly give the edge to the bearish path.
The move up off yesterday’s low is far from clean, and because the bullish yellow count would require a five-wave move off that low to indicate that we are going to see a push to new highs, the best I can come up with is a 1-2, i-ii shown in yellow on the ES chart, with wave 1 of that move coming in the form of a leading diagonal. Under this scenario, this move down off the HOD would need to hold over the 6860 level to keep this count valid. If we break that level, then we no longer have this potential count in play. Furthermore, there is no way to count the move as five up, even in the form of a leading diagonal, should we break that 6860 level.
If we do break the 6860 level, then it would give us initial confirmation that we have indeed topped in all of wave 2 shown in white and have begun wave 3 down. We would still need further confirmation with a break of yesterday’s low to confirm this, however, as there would still be the possibility that we could be working on a B wave down with a wave C up yet to come as part of a larger wave 2. I would view this as a lower probability scenario, however, but until we see a break of yesterday’s low under the white count, I would have to still allow for it.
First things first, though, we still would need to see a break of the 6860 level before we can begin looking down per the white count, as the yellow count is still hanging on by a thread here. But at this point, the bullish count really is in need of a stick save to hold on.
