Markets Move Lower, Leaving Wave (b) Likely Underway
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We ended last week with several possible counts in play; however, with today's break below the 4/10 low, both the triangle and Ending Diagonal counts to the upside have been invalidated. This now leaves us likely working on a wave (b) of a larger ABC structure off the lows.
I still don’t have a clear way to subdivide the move down from the 4/11 high, which is keeping my focus on the larger Fibonacci retracement levels below. As such, I remain cautious in calling an immediate bottom until we see a clearer signal—either in the form of a completed five-wave move up or a break of key overhead resistance.
Zooming into the smaller timeframe ES chart, we can see we are now testing the 61.8% retracement of the initial move up from the 4/4 low, which comes in at the 5119 level. The 76.4% retracement lies below at 5020. Ideally, I’d like to see one of these levels hold, followed by a five-wave move up and then a break above the 5374 level to give us initial confirmation that a bottom may be in place. Further confirmation would come with a break over the 5532 level.
If we’re unable to hold these levels and instead break below the 4938 level, followed by a move under 4861, that opens the door to a direct break of the 4861 low. For now, however—and as long as support holds—I’ll continue to look higher for at least a wave (c) before expecting any break back below the 4/4 low.
