Market Is Setup To Push Higher But We Are Not Out Of The Woods Just Yet
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After pulling back into support today, the market saw a push higher on what does count best as a micro five-wave move to the upside. We are currently testing the top of that micro five but have yet to break over that high. We still have some key overhead resistance levels that will need to be taken out to confirm that we have indeed bottomed, and until those levels are broken, there still is a risk of seeing lower levels before any significant bottom is found.
The most important overhead resistance level remains at the 6684–6728 region. We will need to see a sustained break through that level to give us initial confirmation that we have indeed put in a bottom in wave ii of the larger wave c up. If we break that zone, then the next key level to watch will come in at the 6799 level, which represents the 100% extension of the initial move up off the 3/30 low. From there, we would then have a shot to move into the Ending Diagonal Reversal target, which remains in the 6900–7029 zone overhead.
If we fail to move through the pivot zone but instead break back down under the 6501 level, then it would open the door for this to see a deeper wave b, as I have laid out per the yellow count, at which point support would come in at the 6466–6385 zone below. From there, we would need to see another five-wave move to the upside to give us initial confirmation that a bottom of the yellow wave b is in place.
If we break under the 6385 level, then it would open the door for a break of the 3/30 low and potentially still be following the green count to fill out a larger Ending Diagonal pattern.
For now, we wait and see how this plays out overnight and into the rest of the week, but we should have an answer one way or another soon.
As a reminder, Avi and I will be out tomorrow and Thursday for the final two days of Passover. Garrett will be managing the main room in our absence.
