Market Barely Keeping Bulls Alive

With the pullback today, we had a nice opportunity for a 15 point day trade.   And, if you remember from the weekend analysis, I said for me to maintain a good bullish count, ideally, we want to see the ES rise to the 1650-1660ES region very early in the week.  Well, today, we hit the 1650ES region.   However, the overlapping pattern we saw today has me concerned.

While the market technically can still maintain a bullish posture in the green count, it has done the absolute minimum it must do to keep this 3rd wave alive.   But, again, it is barely alive.

As for our alternative yellow count, we are looking at this rally as a possible ending diagonal for the (c) wave of the y-wave of the yellow (b) wave.  Within that count, we have likely completed wave (iii) of that ED, and overnight should provide us with a wave (iv).

As for the invalidation of the bullish count, at this time, I would not want to see the market breach below the 1639ES level and take out the top of the last 1st wave top which set us up to move higher today.  That would be my first indication that the bullish count will likely fall apart.

So, as we expected, tomorrow will provide us with the catalyst, but, at least we know what our main support levels are for the bullish count – 1639ES and 1634ES.

 Elliott Wave Chart