Market Following Through On Upside Potential

Today the market continued to grind higher, filling out what has been an incomplete pattern to the upside. The move remains quite sloppy, which continues to suggest that we are likely dealing with an Ending Diagonal to finish off this rally. As is often the case with Ending Diagonals, the structure is less reliable and more difficult to track with precision compared to a clean impulsive wave pattern. With that in mind, we’ll continue to focus on the key Fibonacci levels overhead as the next resistance/target zone, while waiting for a clear break of support to signal that a top may be in place.

Looking specifically at the ES chart, I currently have overhead resistance/targets in the 6534–6597 zone, with support/pivot below at the 6358 level. As long as price remains above that pivot, additional upside to fully flesh out this pattern remains in play. Once we reach the upside target zone, our focus will shift to analyzing the structure of the next pullback to help determine which larger-degree pattern is unfolding.

For now, I’m cautiously looking for the market to grind a bit higher before a top is confirmed. When that top is finally struck, the initial move lower should begin with a sharp decline to signal the reversal out of the Ending Diagonal. If we do not see that sharp initial drop, it would suggest that any top struck is not yet of lasting significance.