by Avi Gilburt, ElliottWaveTrader.net
Tuesday September 10th 2013
So, as I said early this morning, we are now in the region where the rubber meets the road. With a whole host of confluence in the 1686-1688ES region, my assumption is that the market will turn down from that region under either count.
The question then becomes how it drops – impulsive or corrective – and where it finds support. Again, the important region to initially break to see bigger downside is the 1668ES region - .764 extension in the move up - with confirmation coming in a strong break down below 1658ES. Ideally, a wave i of a wave (3) down should target the 1640ES region, which would be the .618 extension down of that pattern, and then set up a wave ii, which can be shorted by those that want to wait for a break down.
For those that are looking to short this, please use sensible stops just over the 1690 level, as this should not place you in a position of large exposure if you are attempting to short this overnight or tomorrow morning. Any extensions that take us deeper than that into the yellow box gets me into a neutral position until I see the next larger pullback.
So, again, this is where we separate the bullish count from the bearish count.
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