Market Pushes Higher After Seeing A Small Pullback


Overnight we saw a small pullback that approached the upper end of the micro support zone for the wave (2) that was laid out on the ES 15 min chart in the 4407-4380 zone. During the regular session the market pushed back higher but so far the move higher is very overlapping and looks far more corrective in nature than impulsive. This action is suggestive that the market should ideally push a bit lower back into the micro support one in that 4407-4308 zone before ultimately finding a bottom in the green wave (2). If the market does continue to push directly higher and breakout over the 4443 level then I could potentially count the bottom of all of wave (2) in place. With that being said I would need to see a strong and sustained breakout over that 4443 level to suggest that a bottom is in place. 

If the market does indeed turn lower and breaks under the 4380 level followed by a break under the 4364 low then it would be the initial indication that the market will see a deeper pullback into the later part of the summer before it is ready to push higher once again. This pullback could take the shape of a larger degree wave 4 that could see a retest of the 4200 area that was struck back in mid-July. For now however and as long as we hold over support I am still leaning towards the more immediately bullish path shown in green. 

SPX 60m
SPX 60m
ES  15m
ES 15m
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.