Pressure Still Remains Up – For Now

With the market approaching the micro 1.00 extension on the ES chart, our micro pivot is going to be of utmost importance for support at this time.

As I outlined yesterday, the smallest degree I am tracking is the green wave [i][ii] structure you can see on the 5 minute SPX and 5 minute ES charts, with the ES chart providing more detail within that degree of structure.  In that smaller degree, the micro pivot is going to be very important support as we move through the rest of this week. 

As long as the market holds that support, we are next targeting the 3735-3752ES region.  But, please keep in mind that this can still be the just the final extension in the alt [1] in yellow.  So, that still has not come off the chart.  Rather, we would need to see the market pass the final test with a wave [iv] pullback in green – holding the 3708ES region from the next higher target – in order for me to give in to the uber-bullish immediate count presented in green.  But, until that happens, I am still going to be tracking the potential for the wave [2] structure for all the same reasons I have been highlighting of late.

The other factor that seems to be pointing to the wave [2] pullback – even if we continue to that next higher target – is the IWM chart.  It has clearly led in this rally, and is also ahead in its wave count.  As you can see from the attached chart, it is in wave iii of 3 of [3] already.  And, while it can still push higher into the targeted ellipse on the chart, I think wave iv can pull us back down to the 184.50-188.50 region once this last segment of wave iii runs its course.  In fact, a break below today’s pullback low would be an initial signal of that potential.

So, ultimately, it is entirely possible that while the IWM sees a wave iv pullback, the SPX may see a wave [2] pullback.  But, thereafter, I am going to assume that SPX can outperform the IWM as it plays “catch up” in its wave structure.  But, for now, that is pure speculation.

In the meantime, our micro pivot on the ES chart is our initial support we will need to track in the coming days.  And, should the market continue to move higher this week, we will then move that pivot higher as price rises.

Otherwise, not much has really changed from the analysis I provided yesterday afternoon. The bulls still have the ball, but I still think there can be a fumble seen in the coming days.

60minIWM
60minIWM
60minSPX
60minSPX
5minSPX
5minSPX
5minES
5minES
Avi Gilburt is founder of ElliottWaveTrader.net.