Messy Action As The Market Grinds Higher

Today we saw the market open higher followed by a move lower in the morning session only to push back higher in the final hours of trading. We have now moved over the high that was struck on 1/28 which invalided the most immediate downside setup that was in play yesterday. Unfortunately, the action to the upside is very overlapping and sloppy and is far from giving us a clear signal that this market is ready to see a strong and direct break higher. Furthermore, we remain under the key pivot level which is still leaving us with the potential to move lower before higher but with the break of the 1/28 high this is far from a reliable path forward. So from here, I am planning to simply wait and see how the market reacts at this larger degree pivot to help give us further guidance. 

Drilling down to the five-minute ES chart I now have the key upside pivot coming in at the 6111-6142 zone overhead. If we are able to hold this level and turn down on five waves then it still leaves the door open for this to be topping in the wave 2/b as shown in white on the chart. We would still need to see further confirmation with a break under the 6040 level however with final confirmation coming with a break under the 1/27 low. 

If we break over the 6142 level then it will make it more likely that we are indeed following the purple count higher as part of the larger wave c up. That path is likely going to take the form of a diagonal however as this overlapping action is not what we would expect to see as part of an impulsive five-wave structure. Whether that diagonal is simply part of the wave (i) of that c or if the entire c wave is going to take the form of a large ending diagonal is till yet to be determined as we are still very early in that potential path. So for the time being I am going to hold off on attempting to guess which path it may be taking and wait to see how the market reacts should we break the pivot and fill out further. 

So again for the time being I will simply watch the parameters laid out above and try not to get too deep into the weeds on the smaller timeframe counts as until this clears up in one direction or another I simply do not see a clear and reliable setup in the near term.