Today, we hit our upper target for this potential wave (2). Even before we completed the downside structure, I was hypothesizing that we would need a deep wave (2) if we were going to maintain in the blue box target on the daily chart. Well, now we are here.
On the smaller time frame, we may still need one more small wave up to finish off a micro 5th wave, and it may even extend to the 1690ES region. However, I am expecting that if this is indeed a wave (2), we should not exceed the 1693ES region. In fact, there are 3 calculations that I noted in the Trading Room today which pointed to that level as being very strong resistance of overlapping Fibonacci calculations, with the one higher than that at 1703ES. Although I do not expect them to be hit at this time, I did want to point them out to you so you can determine where you would place stops if you are choosing to take a short trade in this region..
So, in confirming this wave (2) in the larger degree, we will need to see the market drop below the 1658ES region, down into the ideal 1640’s for wave i of wave (3) down. That is the .618 extension down, and a common target for wave i of wave (3).
And, as we have discussed, if the market drops correctively into the 1668-1674ES region, then we may have no choice, but to adopt the green count, and begin looking long at that time. So, now the market has to make a choice and let us know in a very strong manner if a wave (3) down is the plan or not.