by Avi Gilburt, ElliottWaveTrader.net
Wednesday June 19th 2013
As we discussed last night, when the market took out the 1639ES level, it gave you an opportunity to stop out on your long positions with profit, especially since we were trying to give the market the benefit of the doubt from the long side. When the market then took out 1634ES, it really made this sell off a bit more clear. But, it will be when we see 5 full waves down that I will be very confident that we will be targeting the mid 1500 region before we see a corrective bounce into July.
As for the pattern we are now seeing, we seemed to have ended the day just about completing the 3rd wave down off the high this morning. This means we will likely see a corrective rally overnight in a 4th wave of yellow one, which can take us all the back to the 1630ES region. This will hopefully set us up for a drop in a 5th wave tomorrow into an ideal target of 1613ES (but it can be anywhere within the 16113-1617ES region).
When you take a look at the attached chart, you will see that we have almost perfect confluence within these region with an ideal target of 1559ES for the bottom of the (c) wave of the larger c-wave of the yellow 4. This means that next week should see a very strong decline lasting a few days, which can easily measure 60 points before that third wave of (c) completes.
But, again, tomorrow is another key day, as I really would like to see one more decline into our ideal target region of 1613-1617ES for all of yellow 1 of yellow (c) of the a-wave of the larger 4th wave.
And, please do remember, this yellow 4th wave will likely take us through the rest of the summer.
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