Markets Take a Breather WIth A Very Flat Day

Today we saw the market move in a relatively tight range with us now nearing the point at which we opened up the day. So with that, there is really not too much to add to what I had noted this morning. 

My base case remains that we have bottomed in the wave 2 per the green count on the charts. The high that was struck yesterday would then count as either part of or all of the wave i of 3 with the current retrace today being part of wave ii of that wave 3.

If we have indeed topped in all of the wave i of 3 then that leaves support at the 3922-3872  zone and as long as we hold over that zone my base case will remain that we have bottomed in the wave 2 as shown in green at last week's low. We still would need to see confirmation of this bottom with a break over the 4013-4051 pivot zone to confirm a bottom, however. So until we can get through this zone we still can't fully rule out that this may still have a bit more consolidation before this is fully ready to breakout higher but again as long as we hold support I am leaning towards a bottom of the wave 2 being in place.

So overall very little has changed from what I laid out this morning and on Friday and although we do not quite have a confirmed bottom in place just yet we do still have fairly clear parameters to work with here at the moment.

SPX 60m
SPX 60m
ES 20m
ES 20m
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.