Wednesday’s trade was again a strong combination of high-speed collisions between buyers and sellers. Often it was a hit and run higher or lower and other times it was tighter and more ‘whippy.’ The ES did continue to hold higher levels as the market absorbed movement up, down and all around. The ES did remain in a “box” for the entire session with a couple of tests to the high and low ends. The Elliott count has not changed, nor have the situations producing the downside pressure. This leaves me in the same position to say – I don’t have any reason to switch to a bullish near-, mid- or long-term picture. The action thus far continues to adhere to current Elliott counts despite the very favorable reception FB received after basically just beating the street. I’m sure though that the forward guidance also ignited the upside as the “only way to go moving forward.” It has always amazed me that traders are so willing to buy or sell history that may or may not be repeated moving forward. Leaving said traders to fend for themselves and “do what we always do when you beat the street — buy!”
For tomorrow, the Intermediate 3rd wave decline continues to subdivide and did so again on the sub-minute degree. On the chart yesterday’s 4136 low is where I am labeling the completion point for sub-minute wave 1. The action off that low does resemble correction type action and not “impulsive.” However, having said that we need to continue to allow for additional upside – the hourly 50 AM is sitting and holding back the buyers at 4225 – a clean break above clears the path for a test of resistance at 4239 – the current pattern should be contained below 4303 to remain valid. Breakdown from current levels should find support at 4200, 4175, 4135, and then 4101. A clean break below 4101 opens the path down to 3990.