by Avi Gilburt, ElliottWaveTrader.net
Wednesday September 4th 2013
With the rally today, we have now moved into a more confident yellow wave (2) count. But, please do not automatically assume that a larger decline cannot begin at lower levels than our ideal target region over 1674ES. There are significant risks still lying in wait, and I do not trust this market rally at all.
For now, in my ideal scenario, I would like to see a wave v take us into the blue box target I have on the 60 minute chart. While we can consider this c-wave completed in a truncated fashion, I think you all know already how I feel about the reliability of a truncated pattern.
Assuming the (a) wave has completed at today’s high, the .618 retrace of this rally off the lows is around the 1636ES region, which I would not want to see broken if we are indeed to attain much higher levels in a wave (2). A truncated wave and deep retracement would actually be signaling that we may top lower than expected, which is why I really would like to see a better and more defined wave v top for this c-wave of the yellow (a) wave.
So, again, I want to reiterate that there are significant risks still inherent in this market and this corrective wave can take many more twists and turns before it is completed. So, please stay on your toes as Garrett guides you while I am out for the holiday.
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