Tuesday’s trade while moving and holding higher levels gave me the feeling of a slow inside day. The ES continues to trace out what I’m looking to label as a “C” wave up within a minute 4th wave correction. Thus far the ES has not reached above the hourly 200 MA -however the small pattern in force at the moment continues to suggest and allows for an additional pump/pop higher – again as the focus narrows to a few select components in the index. Expectations then remain for a minute wave 5 down is still waiting to begin and carry the ES back below 3639 and eventually below 3600 to 3500 before the next bounce comes into the picture.
For tomorrow, allow for a continued rally to reach – first, above the hourly 200 MA and above Fib resistance at3801. Additional Fib resistance comes in at 3822 to 3840.
A break below the hourly 20 MA at 3750 begins to weaken the upside picture, with a break below the 50 MA at 3732 supporting the top of minute wave 4 being “in” and the wave being complete. A break below 3700 should seal the downside deal.