Market Moved to Yellow
By
After failing to see any meaningful downside follow-through on the smaller potential Ending Diagonal (ED) we had been tracking off the May 30th low, the market reversed sharply higher today, pushing to new highs. With this move, I am now viewing the action as part of a larger ED structure that began off the May 23rd low at 5806.
If this count is correct, we should eventually see a sharp reversal back toward that 5806 region. That said, we do not yet have confirmation of a top in place. For initial confirmation, we would need to see a break back below the 6108 level, followed by a break under 6000. Final confirmation would come with a move beneath the 5960 low, which should then open the door to a deeper move back toward the May 23rd low.
However, if the market continues to push through the 6183 level, that would invalidate the yellow ED count and suggest we are instead in a larger fifth wave up. In that scenario, we could see a continued rally toward the 6300 region before any meaningful top is found.
Unless and until that breakout occurs, I’m maintaining the yellow ED as my primary count on the ES chart. But as always, until we see confirmation with breaks of the key support levels noted above, this ED remains unconfirmed.
