The grind up turns into acceleration

Today the markets opened higher and then saw a small retrace before moving sharply higher once again. Both the SPX & ES have now moved through the upper extended micro targets which were laid out at the 3572 level ES and the 3556 level on the SPX micro charts. These direct extensions higher have not yet changed the larger timeframe charts as I still am counting these moves as extensions of one single five-wave move up off of the March lows. If we look at the SPX 60m chart we can see that we are still trading under the 261.8 ext off of that March low which comes in at the 3627 level. So while we are still quite extended on the smaller timerames (particularly off of the June lows) zooming out to this 60m chart we are still well within the standard parameters for this to be one single five-wave move up off of the March lows.

Now as we have been noting for several days although this is very extended there is still nothing to signal that it has topped just yet. We still need to see this break some of the key support levels to give us a signal that we may have struck even a local top. Currently, at a minimum I would want to see a break of the 3539 level on the SPX followed by a break f the 3506 and then 3494 level to give us an initial signal that this has struck some kind of a top. This should then be followed up with a break of the 3464 level and finally, a break of the August lows at the 3350 level would give us further confirmation that we may have topped in the wave (i) off of the March lows.

So the bottom line is that although we are currently very extended from a fib perspective until we see some break of support this can still continue to extend in an attempt to stretch up towards those larger degree fibs that still sit overhead.

ES 15m
ES 15m
SPX  60m
SPX 60m
Michael Golembesky is a senior analyst at ElliottWaveTrader covering US Indices, the US Dollar, and the VIX. He contributes frequently to Avi's Market Alerts service at EWT while also hosting his own VIX Trading service.