Important Inflection Point

I was going to wait for the weekend to present this, but I think it is important enough for me not to wait.  I believe I have extensively discussed why I have counted this rise in the market as I have over the last two years, but we are now at a point of serious inflection, based upon what I am seeing, and I want to make sure you are all seeing and understanding what I am, so that you can be prepared either way.

At this point in time, we still do not have a 5 wave rise off the lows from yesterday, but I wanted to present to you what I am seeing so that you can be prepared to act as it develops.  Based upon my analysis tonight, we could very well have topped in a b-wave, and if we see a drop below 1821ES tomorrow in an impulsive fashion, then what I am about to present to you becomes purely an academic exercise.

However, should the market maintain support over 1824ES in a micro 4th wave of the current rise, and continue up this week to the 1846ES-1859ES region, there is an alternative bullish perspective for which you will need to be prepared in case it triggers.

First, let me explain that if we continue up to at least the 1846ES region, we will likely have a double top which clearly can be considered the top of wave (5) in our primary count. This would mean we have a significant top in place, and we should be heading down to test the 1740-1770ES region next.  And, this, or the b-wave top seem to be the most likely perspectives to me at this point in time.  There is also the potential to extend as high as the 1859ES Fib we have been looking towards, but we will need a sizeable 5th wave extension in the 3rd wave into tomorrow to see that potential.

However, should the market head up into the 1846-1859ES region, and only pullback correctively from that region, then you must be aware of the potential blue count, which represents wave v of  5 of yellow iii of (3) in the uber-bullish count (see the attached weekly chart).

This uber-bullish count would be triggered with a corrective pullback from the top of this 5 wave structure, a pullback which ideally holds at the 1823ES region (estimated .618 retracement with an 1846ES top), and then takes out the high we make in this current 5 wave structure, somewhere between the 1846-1859ES region.  This would likely catapult us to the 1900 region for wave iii of blue 3, pullback to the 1860ES region, on our way up to the 1990 region to complete wave iii of (3) and put us squarely in the bullish count towards 2500-3000.  Now, while yellow wave iv will likely bring us back to this region, it will likely be another buying opportunity in that case.

Ordinarily, I would not suggest buying a break out, but if the market should set this up, and you are not going to attempt to buy a wave ii pullback, then you can always jump on board after a break out over the high, and I will provide a stop if that should happen.  The initial target will likely be 50 points higher for the top of wave iii of blue 3.  We would then see a pullback to the .618 extension around 1860ES for wave iv of blue 3, on our way over 1900.

Again, this is not my primary perspective at this time, but I will not hesitate adopting this if the market should present this over the next week or so.  This means I will abandon the more bearish perspective I have maintained due to what is ordinarily a low-probability impulsive diagonal in the heart of this count, which also had a shallow retrace, which made this bullish count even more low probability in my mind.  But, if the market does complete 5 up here, and pulls back correctively without being able to take out yesterday’s lows, then I do not want to miss the next 100+ move in the market if it is going to be to the upside.

 Elliott Wave Chart
 Elliott Wave Chart