Did bulls fumble?

Today's reversal after the ECB news seems like a long-awaited victory for the bears, and time will tell if it was or not. However, as an objective analyst, it is not enough of a breakdown to confidently call a substantial top in place here. In fact, as I noted in a wave alert just sent out, breaking down here and leaving a 3 wave top is an issue for the bears. The majority of the time, this is not a terminal pattern, and is suggestive of a b-wave high. That means that this drop could potentially only be a c-wave of a larger correction, setting up another rally into year-end. This is illustrated by the 240 minute chart.

Back to our primary count, which has not invalidated yet, although has reduced in probability since 1778 was breached--A stick save is needed tomorrow in order to put price back on track for wave v of 5 to complete the pattern. This may have been a spike and reversal event below support, which is seen sometimes, but follow through needs to be seen back up in an impulsive fashion tonight. The longer price lingers down at these levels, the more likely it is to see continuation lower. Critical support remains 1773.50, which is the .618 extension. Roughly 90% of the time, when the .618 is breached in an impulsive pattern, it means a breakdown has happened and price is heading to a new low.

As always, if we are breaking down, you do not have to jump in right in the middle and risk being whipsawed. A more conservative approach is to wait for 5 waves down and then short a corrective retrace.

240 MIN
240 MIN Elliott Wave Chart
30 MIN
30 MIN Elliott Wave Chart