Market Held Support Overnight, But Move
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Today the market moved higher after holding support overnight. However, the initial move up off of the lows did not give us a clean five-wave impulsive pattern to give us initial confirmation that we have indeed bottomed in the yellow wave (iv). With that, the door remains open to a larger top being in place per the white wave (b), but we still would need to see a full five down off of the retrace from today's low to confirm this. As of right now, this is still not the case, so the market may still need a few more days to digest this action and give us a clear signal as to which way it intends to go.
As shown on the ES chart, even if we have topped in the white count, ideally the count would be cleaner to see a deeper retrace for the white wave 2 before heading back to new lows. Under this case, we should hold under the 7804 level upon any move higher and then follow that up with five down and ultimately break the overnight low at the 7689 level.
If we break back over the 7804 level, then it would become more likely that we are indeed going to see another push higher per the yellow count to fill out our larger wave (v), targeting the 7895-8000 region overhead.
For now, and until we see some clearer wave structure, I am in wait-and-see mode and will allow the structure of the wave action over the next several days to give us better guidance.
