by Avi Gilburt, ElliottWaveTrader.net
Wednesday February 19th 2014
Yes, I know, the b-wave potential has taken many well beyond the point of patience. And, it still is not confirmed, but it has begun to provide us with a pattern to watch for confirmation.
If you remember the fractal I pointed to over the weekend, this fits it perfectly, and even has a potential top at the same Fibonacci time frames as the prior fractal. Today was the last day within that similar fractal from 2012 as well, at least from a timing standpoint.
But, in order to be much more confident that this is not a pullback before heading higher, we must complete a 5 wave drop below the 1816ES region. If we do see that, followed by a 3 wave corrective rally, then I will likely be putting out alerts to short the market, with targets of the low 1700’s, and, ideally, 1610-1650, if we are going to see a similar decline as the 2012 fractal.
But, from a fractal standpoint, you must still respect the potential in this pattern.
On the smaller time frame charts, I am looking at the 1831ES region as important resistance if this is going to continue to the downside in an impulsive count. Of course, we can see a leading diagonal develop, but, for me to be more confident of a real top being in place, I want to see a real impulsive pattern develop to the downside and below the 1816ES region, without taking out the 1831ES region first.
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