by Avi Gilburt, ElliottWaveTrader.net
Wednesday August 7th 2013
When we attempt to determine if the market indeed has a top in place, I noted over the weekend that we will need to see an impulsive pattern to the downside develop, which will take out the 1660ES level. So far, I can definitely see an impulsive pattern coming down, but we do not yet have enough information to know if this pattern has bottomed yet.
What we are in search of at this time is some indication that a wave ii in yellow or a b-wave – for the green count - is in place and the market has not given us any clear indications of that just yet. While I can come up with an argument that wave i and ii are completed – the alt count – as you can see, the wave ii retrace is almost non-existent, which is why I do not see it as a strong likelihood at this time.
For now, I am watching a potentially larger decline take hold, that can take us as low as the 1670ES region if the market is unable to move over the 1690ES level. Assuming it is able to move through 1690ES tonight, then the next resistance region I see is between the 1693-1696ES region, which is the .500-.618 retracement of the current move down off the highs.
So, we still need a bit more information to be able to trade this region more confidently, especially when it is still possible to set up a rally that can take us up to 1730ES, as discussed last night. So, we do need a bit more patience to be able to determine, with a greater degree of confidence, when this market has indeed topped.
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