by Avi Gilburt, ElliottWaveTrader.net
Thursday February 6th 2014
Today, we saw the move higher towards the higher blue box region we were anticipating with a move through the 1755ES level. While the market tested 1755ES twice early this morning and pulled back each time, I noted early that if we were unable to break down below the 1737-44ES region, we would be setting up a move higher for a nice double digit gain day. And, with the pullback and maintaining support at 1744ES, that is exactly what we got. And, we hit our next higher target at 1768ES.
However, the current pattern may still have a little left in it to take us a little higher if this is a corrective c-wave up. So, this morning, as it was developing, I had to modify my target to the two upper Fib levels represented on the chart. Right now, we are in the modified blue box target I presented earlier today, and you can see the larger fib relationships represented in this region based upon the notations on the 60 minute chart. But, for this to be a true corrective rally in the best sense, extending over the 1775ES region at this time places the potential for the bullish count on the table, and puts the bearish count in question.
Assuming the market does pullback from the current region below 1775ES, we will need to see a very strong drop in an impulsive fashion that takes us below the 1732ES region to signal the next phase of the bearish corrective off the recent highs. If we were to begin such a move, then our target will be the 1650ES region in a 5 wave extended c-wave down.
However, if the market were to pullback correctively, then it likely means we will be heading towards the 1800 region, and will be left with either a larger degree wave 2 (or b-wave), and if we maintain support over 1758ES on the pullback, then we may even have to entertain the potential for a 5 wave impulsive move off the recent lows.
Therefore, I am going to take it one step at a time, and what the market does tomorrow will be quite important, as I am sure you are all well aware.
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