Blue Box Finally Hit

With the top of the blue box being hit today, the manner in which the market reacted made it seem like it was a red box on fire.  But, that is the power of Fibs.   For now, I am still not yet convinced that the bottom has been seen, and I need the market to prove it to me with a strong move through the 1682.50, which is the 1.00 extension of the move off the lows.

If it is unable to do so, then I would expect that another low can be seen before the expected 5th wave up begins.  But, note that the MACD on the 60 minute chart is attempting to set up a nice positive divergence on this low, and the MACD-H is clearly showing nice positive divervence.   Although these are potential bottoming signs, the market has not yet taken out upside resistance in a strong manner to indicate the bottom has yet been seen.

But, I must warn you that the market is truly acting quite dangerously, and trading on the long side now carries with it significantly higher risk than it did earlier this year.  So, if you remember, I noted that if you wanted to trade this 5th wave, you can chose to start scaling in as we moved into the blue box, and place stops just below it.

Ultimately, until the market can begin a strong rally, taking out upside resistance, I am afraid I am going to have to expect another low, which will hopefully be on nice positive divergence on the 60 minute chart.

 Elliott Wave Chart