With the market following through to the upside through the 2646ES region, it then pulled back to the 2620ES region, and turned higher again. As you may remember from the weekend update, that pullback early this morning had to hold over the 2610ES region in order to maintain the pressure to the upside. So far, the market is behaving in a relatively textbook manner for a (c) wave rally.
It also seems that so many are just sitting on the edge of their seats waiting for the next shoe to drop. So, at least for now, we may have built another wall of worry which we may continue to climb as high as the 2800 region.
The key right now to further upside extension is today’s pullback low at 2620ES. As long as we hold over that level, we may even trace out a (i)(ii) for wave v of 3, as presented on the 5 minute ES chart. This can point us up towards the 2800 region later this week, as long as we continue to hold support.
Alternatively, a break of 2620ES would place us in a much more uncertain position. It would suggest that we can drop down to the lower support presented on this chart, which, if held, can still point us up again towards the target box overhead. However, a break of that support can point us to lower lows in a more direct fashion.
So, please remember we are still likely within the throes of a 4th wave. Moreover, even the bullish scenario has us within a b-wave of the 4th wave. These are quite treacherous, and trying to track one is akin to throwing jello for distance, as I have noted before. So, please make sure that you are taking profits when you can if you are trading these movements, as a profit can be reduced to a loss quite quickly within these structures.