Market Testing Previous High
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Today we saw the market move higher overnight and continue to grind higher throughout the session. We are currently testing the high that was struck on 7/6, which is making the most immediately bearish path less probable at the moment. With that being said, until we see a break of that level, I will keep this path on the board, as the overall action is still very sloppy and the alternate counts I am watching are still far from ideal from an Elliott Wave perspective. If we are going to see an imminent top, this would need to start turning down sooner rather than later and do so in five waves. If we continue to push higher, then I will adopt either the yellow count (which I have brought back) or the purple count should we continue to see further strength into next week.
As shown on the ES chart, if we are going to find a top in the white wave b, we need to turn lower very soon and then break back under the 7529 level. This should be done in five waves, and then we would need further follow-through with a break back under the 7468 low. From there, we would track wave c of larger 3 down as part of an Ending Diagonal for the larger wave (c).
If we push higher and hold under the 7706 level, then I will still allow for the yellow wave (b) topping count to be in play. There are several issues with this count. However, I will still allow for it as long as we hold that 7706 level, and I would need to see confirmation of this count with a five-wave move to the downside after breaking higher.
If we break directly through the 7706 level, then it would open the door for the more bullish purple count to be in play, and I would want to see further follow-through with a move up into the 7800 region. While technically valid, the fact that we saw a very shallow retrace for the potential wave 2 under this case is certainly problematic, but I do have it on my radar at the moment, and should we continue to push higher through resistance, it would likely become the primary count. For now, however, it remains an alternate.
