After seeing a deep retrace yesterday that broke the upper support levels that we had been watching we saw the market rebond off of those lows. I noted yesterday that the initial signal that we may have formed a bottom would first come with a break over the 4151 level on the ES followed by a full and clear five-wave move up off of lows.Today we did break that 4151 level on the ES and the case could be made that we have five up off of the lows. Unfortunately that five up is far from ideal, and I would consider it as borderline "clear".
Today we saw the SPX move up strongly and break through the minor micro pivot that we had been watching at the 4013-4051 zone. This pivot break gives us further confirmation that we have indeed bottomed in the green wave 2 at the 3852 low that was struck on 3/25. With this push higher it has also made tracking this fairly straightforward and we now have clear parameters to watch over the weeks and months ahead.The next key resistance level that I am watching comes in at the 4113 level. This level represents the 100ext of the initial move up off of the 3720 low.
Today the SPX continued to push higher and saw an intraday record high just over the 4000 mark. Furthermore and more importantly we testing the lower end of the minor pivot that I have been watching for several days now which comes in at the 4007-4046 zone.From here a pullback would be reasonable to expect as it is quite common to see retracements near these pivot levels prior to seeing a breakout through them on the first attempt. Now assuming we do indeed see a retrace from around current levels there are several paths that this retrace could take as I am showing on the ES 20min chart.
A REAL WORLD EXAMPLE ON USING FIBONACCI PINBALL PIVOTSTo expand on my post regarding pivots and how and why we use them in Elliott Wave and Fibonacci Pinball I want to show the RUT chart off of the March lows. As we have been noting for quite some time this pattern has been much more clear than the other indexes that we have been watching as it seems to be following a slightly different pattern and is a bit ahead of the other indexes. The clarity of the pattern off of those March lows gives us a very good real-world example of pivot levels on multiple degrees of Elliott Wave fractals.
Today we saw the market move in a relatively tight range with us now nearing the point at which we opened up the day. So with that, there is really not too much to add to what I had noted this morning.My base case remains that we have bottomed in the wave 2 per the green count on the charts. The high that was struck yesterday would then count as either part of or all of the wave i of 3 with the current retrace today being part of wave ii of that wave 3.
We have a setup in place for long IWM with stops under the 207.96 low. This setup initially targets over the 3/15 high at 235.47 but has the potential to turn into something more with the potential to see an ultimate move towards the 240-250 zone. In either case the R:R is good using the 207.96 low as a stop.
After getting a break of the upper support levels yesterday today we saw all of the major indexes hit and hold the lower support levels that we had been watching on all of the major indexes. We then saw a mid-morning bounce that relieved a bit of the downside pressure that we had experienced yesterday and the markets are now positioned to be in a good bottoming region.
Today we saw the SPX continue to bounce around in the same region that it has been trading in for the past several weeks failing to give us any real resolution to the paths that we have laid out during the last several trading sessions. We also saw another day of divergence between the major indexes with the Nasdaq and Russell 2000 trading down today while the SPX is still trading in positive territory as of the time of this writing.
IWM - IF we manage to hold the 76.4 retrace here as part of the wave 2 as shown on the RTY chart then we have a nice setup here into the summer. In fact even if we break support we still have larger support below under that red path and still should end up higher into the summer months. Attached is the intermediate-term options workup for this setup targeting 259 for wave 3 with the 243 level acting a the 100ext and min target for a wave C assuming we hold the 76.4 retrace here.
After seeing a fairly sharp drop yesterday on what can be counted as five down off of the highs we saw the market open higher near the upper end of the ideal resistance level for a potential micro wave ii. We then saw a move lower into the afternoon session with the market holding over yesterday's low and over the 76.4 extension pivot of that move down off of the highs from yesterday.
Today we saw the market break out to new highs with the SPX up nearly 1.5% and over 50 points at the time of this writing. Furthermore, we broke out over the key micro resistance levels that I had noted yesterday that should have held if we were indeed going to see an immediate pullback for the wave C down back below the 3739 low. So with this move higher through the resistance levels noted it is now looking more probable that we have indeed bottomed in all of the green wave 2 and headed higher for the wave iii of 3.
The market managed to find it's way up off of the lows and move higher during the shortened holiday session and into the end of the regular trading session today. We are however still trading well within the standard retrace territory for a b wave on the SPX, RUT and NDX. Addiontlaly all three indexes still look to have only three waves up off of the lows so far with it being very difficult to count five up on the Russell 2000 index which has been following the cleanest path off of the Summertime lows.
Overall the SPX/ES has not moved much today and we are still trading just under the 100 ext at the 3813 level from the move up off of the 3767 low. As I noted this morning if we can break through this 3813 level followed by a break of the 3825 level we should be on the way to confirming the green count. At that point, we should simply be able to move our support levels up as we follow our impulsive fib pinball guidelines.
The ES has done an excellent job of hitting the lower end of our micro support level almost on the nose today before turning higher here into the close thus still following the green path as laid out on the charts. If we have indeed bottomed in the green wave iv from here we should see a full five up and/or a break of the 3735 level to give us an initial signal that we have indeed struck a bottom in that wave iv and are on our way to the wave v of (iii) overhead.
by Mike Golembesky - 4 months ago
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