Market Still Has Yet To Show Its Hand

Today we opened lower but quickly reversed that move and as of the time of this writing we are trading up slightly from the close on Friday. We are still trading over the key support to the downside which if broken would give us an early signal of a breakdown, but under key resistance which would signal that we are going to see a deeper retrace higher. So with that, the market is still sitting in a bit of no-mans-land on the smaller degree timeframes and has yet to show its hand as to whether we are going to see a more immediate breakdown lower or whether we still have a bit more work to do to the upside before starting the larger move down. 

Bigger picture there really is not much to add to the analysis that has been posted in Avi's weekend update and the smaller degree timeframes are fairly straightforward here. As we retrace higher we are going to need to see a break of the 4485-4495 zone to signal that we are going to see a deeper retrace into the 4516-4573 zone overhead for the larger wave ii/b. If we are unable to move through that 4495 level but rather turn back under the 4453 level then it would open the door to this having already topped in all of the wave ii/b with the move up off of the 4444 low being a wave (ii) of iii/c. We still would need further confirmation with a break back under the 4411 level below to confirm that we have topped. 

So while today's action has been rather slow the corrective nature of the move up off of the lows is still supportive of a larger degree top. The bigger question at this point is whether we are going to see a deeper retrace into the 4517-4573 zone overhead or whether we are going to see a more immediate breakdown lower.  The pivot levels laid out above should give us the answer to that question sooner rather than later.