Tonight’s update includes the Elliott update but also includes a more detailed discussion on trading the expected move and subsequent moves from there.
Friday’s trade was a more convincing rejection of any move above 4500 with the ES breaking several levels of support. Additional support has also been given to the high at 4459 completing the advancing sequences with a larger more destructive correction beginning. Within the current decline it appears that the ES has arrived at a “point of recognition” where support levels get broken as the market recognizes the trend change and in this case that would from ‘up’ too ‘down’. On an Elliott basis this a classic wave 3 of 3 move – an extension in the direction of the trend change. I would expect additional downside with periods of acceleration. Support levels may only provide moments of ‘pause’ before the move continues to unfold. I go over the expected count with support levels to contain the various levels of the decline for now.