by Avi Gilburt, ElliottWaveTrader.net
Monday October 21st 2013
Currently, the most likely count has us in purple wave iv at this time. The Wave Alert I sent in the later afternoon is still quite applicable:
Ideally, this wave iv should drop down into the 1729-1733ES region. But, the higher the consolidation, the more likely it is that the market wants to move through the 1749ES level and attack the 1.236 extension at the 1763ES level.
From a larger degree trend, it is important what it does after the wave v completes. As long as we remain over the 1726ES level on a pullback, then that pullback would be considered green wave IV, and we will likely be heading up towards 1772-1786ES next. However, should 1726ES break after purple wave v completes, that is the signal that the market has potentially topped.
So, for now, as long as the 1726ES region holds as support, I am looking up later this week to at least the 1749ES region, and potentially the 1763ES region. But, when we complete 5 waves into one of those targets, I will likely be exiting my longs and will see how the market reacts from that point. For aggressive traders, you can attempt to short after the next 5 waves higher completes into one of those targets.
But, if 1726ES does not hold at this time, that is a warning shot to bulls, with a crack of 1717ES a very bad indication, as discussed over the weekend.
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