I would like to present a new “alternate” view on tonight’s update.  The premise is that in the ES the market remains in the process of tracing out an Intermediate wave 4.  The preferred count remains that Intermediate wave 4 completed at the 4224 low on July 19th.  The new “alternate” count suggests that Minor wave ‘a’ of Intermediate 4 completed at the 4224 low.  From there Minor wave ‘b’ began to unfold and completed at Thursday’s 4422 high.  This then suggests that off of last Thursday’s 4422 high Minor wave ‘c’ began.  The alternate view suggests that we are heading into a much steeper and deeper move lower. Support levels are included with Fibonacci extensions showing the potential for a drop below 4200 to occur before the larger advances take over.  Below is the original update — and remains the preferred view until negated by the market.  Both views remain active for now. 

Monday’s trade was not very eventful.  In fact the ES remained in a “box” that started to last week.  Tuesday’s high and low are the initial boundaries.  Last Thursday’s new all time high at 4422 expanded the upper boundary and Thursday’s lows gave us lower boundary. In Elliott terms I believe we are still within a Minor 4th wave correction.  Waves ‘A’ and ‘B’ are complete with wave ‘C’ still unfolding off of the 4422 high.  Remembering that all ‘C’ waves are 5 waves –  I believe waves 1, 2 are complete and wave 3 nearly so.  Wave 3 of ‘C’ began off of today’s intraday high at 4419 and looks to have completed waves 1-3 with wave 4 being close to finishing.  If this is the case an additional wave 5 decline would needed to finish wave 3 of ‘C’ before then yielding to wave 4 of ‘C’ wave bounce .  That would leave the ES with a final wave 5 of ‘C’ to complete the larger Minor wave 4 correction.  Expectations remain for Minor wave 5 to pick up the advance again with prices moving to new highs.