Market Still Holding Support
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After moving lower overnight we saw the market push higher in the afternoon session and retest the 5180 high that was struck yesterday. We have yet to break that level however as we are sitting just under that level at the time of this writing. So with the inability to breakout just yet we still do not have confirmation that we are heading higher in the yellow count. Since we are still well over support however we clearly do not have any confirmation of a top just yet either.
While the near-term pressure has remained up we are still in a bit of no-mans-land as we trade within the same 100-point range for the past two weeks. Ideally, we will have an answer as to which way this is going to break in the next few trading sessions and as long as we remain over support a push to new highs does look like it is in the cards.
While we are in a bit of no-mans-land as we trade within this range the parameters are still fairly clear here. As long as we remain over the 5131 low that was struck today the near term pressure will remain up per the yellow count. We will need a breakout over the 5187 level followed by a break over the 5205 level to confirm that we are following that path towards the 5250-5300 region.
If we are unable to hold that 5131 low but rather break below it then it opens the door for this to have already put in a top per the purple wave 5. We still would need further confirmation of a top with a break under the 5090 level. If those levels break then I would still expect to see a fairly sharp drop back down toward the 4940-4900 region as this is the originating point of the potential ED off of that low.
While this action is seemingly slow and boring given where we are in the bigger picture count I still remain quite cautious in this region. Whether we need another higher high or not bigger picture we are still in a larger degree topping zone and with what is looking like an Ending Diaoganl to finish off this move, once we top the initial reversal should be quite swift. That being said until we actually break some support we still can continue to grind higher before that ultimate top is seen.
