Market Down But Still Not Out
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Today we saw the equity markets move sharply lower across the board into the afternoon session. All three indexes that I watch did however manage to hold their respective support/pivot levels which is keeping the most immediately bearish path at bay for the time being. The action into the end of this week is likely going to be key in determining whether the market is able to push to another higher high or whether we have indeed seen a larger degree topping structure. Both the structure of the next push higher as well as if we can indeed hold the key support levels that were struct today will likely be the determining factor in telling us which near-term path we are following.
As shown on the 10min ES chart we can see that today's move stopped just over the 61.8 retace level of the move up off of the 10/7 low. Ideally, if we are going to see a push higher we should see this hold either that fib at the 5797 level or the 76.4 retrace fib just below at the 5768 level. We should then see a full five up off of one of those levels that is then followed up with a break over the 5900 level and ultimately over the 5926 high.
If we are unable to hold the 5768 level and move under that level then it would open the door for a larger degree top to be in place. We would however still need further confirmation with a break under the 5722 low to give us additional confirmation that a top has indeed been struck.
The RTY has also hit some very key support today but I do want to note that it is showing a potential five-wave move to the downside so I remain a bit more cautious with this chart as long as we hold under the 2311 level. With that being said until we can see a break under the 2175 low there still remains a near-term path that still can take this back over the 2340 high before any sort of larger degree top is indeed in place.
So while today's action was certainly somewhat sharp we did manage to hold support and unless and until we see a break of those support zones across all of the indexes we still do not have confirmation that a top has been struck just yet.
