by Avi Gilburt, ElliottWaveTrader.net
Monday September 16th 2013
This is some of the most unusual market action I have seen in a long time. With the large gap up overnight, the market failed to present the most bullish case with an appropriate consolidation and then taking off to new highs today. That would have solidified the bullish case.
But, with this move down, we have enough waves in place to consider a leading diagonal down for a wave 1 down, with the .618 retracement of that decline being in the 1698.75 region for a possible wave 2. But, as you know, diagonals are not exactly the most reliable of trading patterns, but it is now there for all to see.
Until the market is able to move over the August high of 1709.67 in the cash index, the yellow count remains alive – especially with this potential LD down – but, it is clearly on life support. A strong decline breaking down below 1673ES is what we really need to see to get the bearish count back on track. Otherwise, the next higher target region is 1708ES-1713ES.
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