Still Looking for Local Top, But Need to Break Support

The market traded higher once again Thursday, continuing to extend in what we are still tracking as wave A of (B) off the December low.

As noted this morning, without an indication of a local top in place already, the potential for another push higher was still on the table, especially with the Emini S&P 500 (ES) chart still a bit shy of its measured move (a=c) target at 2655. The market decided to capitalize on this opportunity and spiked almost all the way to that fib resistance near the close today.

While the price action today can easily fit within a small blow off top scenario along  with a more complete looking micro structure into today's high, we still need to see price break some initial support before assuming that a top is in place. To start with, price now needs to break below the overnight low made at 2597 ES as the initial indication that the B-wave pullback has started, followed by better confirmation below 2580.

Until then, it is possible that the ES wants a more direct tag of the 1.00 extension at 2655.50 still before attempting to pull back.

ES H19 - Micro - Jan-17 1211 PM (2 hour)
ES H19 - Micro - Jan-17 1211 PM (2 hour)
Garrett Patten is a senior analyst at ElliottWaveTrader covering both U.S. and international equity indices as well as stocks.