Retrace Higher Still Underway?

Today the market opened sharply lower only to see a fairly sharp reversal in the afternoon session. The case could be made that the reversal up off of the lows is a micro five wave move which is what we would need to see to suggest we are going to push higher in the wave (c) of the larger wave b per the purple count on the charts. 

As long as we can hold over micro support we still have the setup in place to push higher to finish off the larger wave b before turning down once again. If however we begin to break under today's LOD then it would open the door for the market to see another lower low before a local bottom is in place for the initial wave a down off of the highs. 

Bigger picture still very little has changed and we have likely either finished the initial wave a down off of the highs of a much larger corrective move or need one more lower low to finish off that wave a. Under both cases, the odds are that we have struck a larger degree top. 

Smaller timeframes if we have indeed bottomed in the wave a and are heading higher in the wave b then we should hold over today's LOD at the 4989 level and continue to push higher over the 5091 level. From there we should fill out a full five up off of today's LOD and before turning down once again. Resistance under that case comes in at the 5111-5194 zone and this is the ideal zone to hold for that wave b. 

If we see a break back under today's LOD then it would open the door for this to see yet another lower low as laid out in the white count on the charts. Under this case, I would be looking for a wave v down to finish off the wave (c) of a towards the 4905-4826 zone below. Over today's LOD will however keep the near term pressure up and does not provide us with any confirmation that we will indeed see that lower low. 

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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.