Market Moves Higher And Through The First Pivot
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Today we saw the market continue to push higher breaking through the first micro pivot level giving us initial confirmation that we have put in at least a local bottom with the low that was struck last week. We still need to see further upside follow-through to further confirm that a bottom is in place but the break of the micro pivot is certainly a good initial start.
Drilling down to the 3 min SPX chart we can see that we have moved over the 5681 level. With the break of that level, I am counting us having formed a very shallow wave b/2 at the low that was struck at the 5611 level. If that is indeed the case the next micro pivot that I will be looking to see break to the upside comes in at the 5711 level followed by the 5742 level. Should we see those levels break then we have a fairly clear shot up toward the 5800-5873 zone for the wave c/3 on the micro level.
Keep in mind that because we likely completed an ending diagonal into the lows last week the reversal off of those lows and back to the origination point of that ending diagonal should be fairly sharp back up towards the 5984 region.
Should we see this break back under the 5611 level then it is possible that we be forming a local top in a wave a of a larger corrective pattern. Under that case as long as the move lower remains corrective in nature I still would be looking for further upside action. With that said because we are likely dealing with an Ending Diagonal I would expect the move back to the origination point to be fairly sharp. So my base case is that we have not quite compiled the initial wave a just yet.
Bigger picture there is not much to update from the weekend analysis so for now my focus will be on the smaller timeframe pivots and price levels I noted above.
