Each evening Avi Gilburt provides in-depth Elliott Wave analysis on the emini S&P 500, with occasional coverage of the U.S. Dollar, VIX, oil (USO), gold (GLD) and silver (SLV).
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With the push higher we wanted to see today, the market has not given us any indications that it does not yet want to head even higher still. No support has been broken, nor do we have a solid 5 waves off the highs.
For now, I am watching the 1864-1869ES region as support for what may be wave iv, with only the wave iii completing at today’s highs. But, until that support region is broken, I cannot even entertain that 5 waves has completed into our topping region.
The consolidation we saw today was most likely a 4th wave, and I am counting it as the 4th wave of the final 5th. Alternatively, as you can see in the grey count, if the market truly has designs on a 1900 print, then this is only wave (4) of green iii. But, as we move higher, I will allow the Fibonacci support levels to guide me.
For now, the support I am watching is the 1859-1866ES support region. As long as we remain above that region, then I am looking higher into tomorrow.
With the market holding the all-important 1833ES level yesterday, and taking out the 1853ES region of resistance, I said that we have to then look up towards the 1880ES region, which is where we find ourselves right now.
As of my writing this update, the market is still completing wave iii in this move off the lows. The question in my mind is, when the current 5 wave structure completes, will that finally be all of wave 5, or will that simply be wave i in an extended wave 5.
So, another bearish set up is in place. The question is can the bears actually follow through at this time.
While the market did knock out the potential larger degree ending diagonal, it still has left me with the issue that the pattern up does not look wholly complete, which is why I said I did like the larger diagonal over the weekend. Furthermore, the market has yet to be able to break down below the important 1833ES level.
With the 1833ES level holding overnight, it provided us with the spring board for this current rally, which is likely a 5th wave rally. The main question we have at this time is what is the extent and degree of this 5th wave.
As you can see on the 60 minute chart, the 1833ES level was the point at which the a=c correction could be seen as a running flat for the 4th wave, which would set our sights as high as the 1886ES region. That would also be where the 5th wave would be equal to the 1st wave.
All we have been getting is corrective action with lots of whipsaws to both ends of the tape. In fact, the retracements on both sides have been much deeper than normally seen in standard moves. But, remember, in both scenarios on the table, we are still either in an ending diagonal or a larger degree 4th wave taking us back down to the 1812-1819ES region, both of which move with corrective wave structures.
With the breakdown of the 1845ES level into the close yesterday, it made the standard impulsive pattern we were watching to the upside much less likely. However, as mentioned yesterday as well, it brought to the forefront an ending diagonal possibility.
Today, we were following what should be the bottom of a wave iv in an ending diagonal, potentially followed by an a-b pattern in the 5th wave of the ending diagonal.
I think it is quite clear that the market resolved this region to the upside today. With that, I have taken off the b-wave count from the chart. However, just so you know, it is "technically" not dead, for if all we complete is wave iii, and then take out support, I will bring it back.
But, for now, I am going to default to the bullish count on the chart. As you can see, it has us in a wave (4) of iii, as long as we hold the 1845ES level.
Here's Avi's latest Live Video from the close today -- a good addendum to his Market Update for today and a sample for those who don't have the service. When you click on the link, it will download the Webinar file to your computer.
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With the market coming back up to the highs yet again, it is threatening once again to break out to new all-time highs. But, the question now is if it has the strength to do so, or are we going to roll over and test the 1810ES region.
But, without the market turning down today and breaking any support levels that we cited all day on the way up, it certainly has left open the possibility that a 4th wave has completed at the overnight low, and a 5th wave is in progress.