Market Holds Support – Higher Levels Still in Play
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The market opened lower today but quickly found support near the 100% extension of the initial move down off the highs and pushed higher into the close. This price action continues to suggest that the decline off the high is corrective in nature, keeping the door open to higher levels as we still remain above even the upper support zones. While I can’t completely rule out another dip to further flesh out a fourth wave down from the highs, as long as support holds, the pattern continues to look better with another push higher.
On the ES, I’m watching the 6453–6420 zone as upper support for micro wave iv. A break of this zone would be an early signal that a local top may be in place, with further confirmation coming on a break below 6390. As long as these levels hold, wave iv still appears to be forming as part of an ending diagonal to complete wave 5 off the 6239 low. If that support holds, a wave v higher toward the 6525–6600 region remains in play.
Should 6390 break, I would then shift focus to the 6239–6151 region as the next major support/pivot zone. A break of that larger support would be needed to confirm a higher-degree top. For now, despite the choppy and overlapping nature of the current structure, there’s no clear evidence that a top has been struck.
