Has Wave IV Completed?
Since we got the decline we expected today, the last stages of this decline became quite sloppy. It has opened the door to another potential leg down to be seen into tomorrow.
As you can see from the attached charts, we are in our primary support zone on the 60 minute chart, and it extends down towards the 1726ES region. In fact, if the rally we are getting at the end of the day is the top of a (b) wave of IV, then the (c) wave of IV would take us down to that region.
At this point, it would take a strong break over 1746ES with follow through of 1748ES to have me looking up at our next ideal target of 1776ES. However, the bulls are not out of danger just yet, as the downside pattern can still be considered a leading diagonal down, which means that the trend has potentially changed and we have a top in place. So, we still need a little more wave action to identify the next larger move in the market.