Market Still Keeping Us Waiting
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The market is trading flat on the day after moving down at the open and then back up in the afternoon. We are still trading under resistance, and the action up off of the low still remains corrective in nature. This action keeps the parameters I laid out yesterday unchanged, and as long as we continue to remain under resistnace my base case is still that we will see this resolve lower before breaking out to new highs.
As I noted yesterday, overhead resistance remains in the 7551-7594 zone as shown on the ES chart, and as long as we continue to hold under this zone, my base case is that we are working on a wave 2 of the larger wave (c) down. Under this scenario, I would expect wave 3 of (c) to begin from this region. We will need a full five-wave move to the downside, followed by a break under the 7504 level, to give us initial confirmation that we have begun wave 3 down, with further confirmation coming from a break of the 7470 low that was struck yesterday.
If we manage to move back over the 7594 level and follow that up with a break back over the 7633 level, then it would open the door for this to be following the more immediately bullish yellow count. However, we would still need to see a sustained break over the 7703 level to further confirm that we are indeed following this path. For now, and as long as we continue to hold under resistance, I am giving the benefit of the doubt to the white count, which from an Elliott Wave perspective, has the higher probability of playing out.
