by Avi Gilburt, ElliottWaveTrader.net
Monday December 9th 2013
The change from the Weekend Update is that the market took out the 1807ES level, which provides us with a lower likelihood that the top is in for now. However, until the prior high at 1812.50 is taken out to the upside, there is still the potential for the wave (2) top, but we will need a strong break down below 1795ES to begin to make it more likely at this time. But, with a c=1.618E*a relaltionship, we do have to recognize that those are much less common, but still possible, as long as the prior high holds as resistance.
For now, assuming the bullish count is in play, the market SHOULD maintain support over the 1.00 minor extension at 1800ES, which is where wave (4) should bottom. However, we still have a set up that can give us an extended 5th wave in wave (3), so the jury is still out on the potential break out.
Ultimately, the market comes down to this: Support for the main bullish count is at 1800ES, with a must hold level of 1795ES. If we take out the 1812.50 level before we see 1800ES then we will likely target 1818/19ES before we see wave (4) begin.
A strong break down below 1795ES would have me back to thinking wave (2) has topped, and if we can see a solid 5 wave move down in a wave i of (3), then we can begin to short more aggressively in a wave ii of (3) bounce.
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