Market Moves Lower But Is Still Over Support

Today we saw the market open flat and stay flat most of the day. In the afternoon session, we saw a fairly sharp drop after the FMOC minutes were released but we still managed to hold over support. So with the hold of support and unit that support breaks, we still do not have confirmation that we have put in a top just yet. 

So while I am still looking for a top in this region the analysis itself still remains for the most part unchanged as we await for support to break to give us that initial confirmation that we have indeed put in a top. 

As I noted previously the 5269 level still remains a key upper support level and as long as we are over that level then we still can see this push to another higher high to finish off the wave v of 5 fo (c) of larger wave b. The micro price action over the past several days is still not terribly clear and because we did not get a clean break over the 5/16 high cleanly satisfying the wave v of 5 a push to new highs would be the cleanest path at this point in time.  If we do indeed break higher then I will be watching the 5327-5383 zone overhead as the next key overhead resistance/target zone. 

If and when we break under that 5269 level then it would give us a very early signal that we may have topped in all of the wave b but we still would need to see that followed up with a full five down off of the highs and a break under the 5223-5182 zone below to further confirm a top. From there we can see the size and depth of the initial five wave move down off of the highs to give us a better idea as to what the next larger degree target to the downside will be. 

For now, however, and as noted previously we simply need to continue to be patient, and cautious as the market navigates what we are counting as the final stages of this larger degree pattern.

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Michael Golembesky is a senior analyst at ElliottWaveTrader covering US Indices, the US Dollar, and the VIX. He contributes frequently to Avi's Market Alerts service at EWT while also hosting his own VIX Trading service.