Consolidation ideally close to completing

The market attempted a bounce this morning, but failed to follow through and instead turned lower into the close again. As mentioned this morning, although the futures hit the .618 retrace at the pre-market low, price may want to print that level during regular trading hours, which is what we got.

With the SPX now at the .618 retrace of wave (1) of 3, ideally we can put in another local bottom here and turn up tomorrow in the start of wave (3) of 3. Breaking back above today's high will be the signal to watch for that wave (3) of 3 is underway. Otherwise, the next support is the .786 retrace at 2259.50, below which opens the door to a retest of last week's low and perhaps a larger flat for circle wave 2.

Although I would prefer to see us hold last week's low from here, from a bigger picture perspective there is really nothing to be concerned about for swing traders as long as we are above the late December low at 2233 SPX.

$SPX - Micro - Jan-17 1319 PM (30 min)
$SPX - Micro - Jan-17 1319 PM (30 min)
Garrett Patten is a senior analyst at ElliottWaveTrader covering both U.S. and international equity indices as well as stocks.