Yesterday's Low and Today's High Are The Key Levels To Watch
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Today we saw the market move up on fairly sloppy wave action not giving us a clear signal that we may have put in a bottom just yet. Furthermore, the action down off of today's high of the day can be interpreted as five waves to the downside. So with that the risk of the market continuing to move lower certainly remains high. If this market has put in a bottom we are going to need to hold yesterday's low and push back up over today's high of the day. So which level breaks first will likely be the key in determining which way this market will move in the weeks ahead.
As I noted above the move up off of today's low is not a clean five wave move. I can force a leading diagonal up off of the lows but even that is not terribly clean and this move up counts much better as a three-wave move. So with that there is no signal that we have put in any sort of lasting bottom just yet. Furthermore, the move down can certainly count as five down.
As long as we remain under today's HOD at the 6009 level the risk of this continuing to push lower remains strong. We would however need to break under the 5907 level to further confirm that we are indeed going to follow the more immediately bearish purple count. Under that case the next downside pivot would come in at the 5869 level and if that breaks the door is then open to seeing a move into the 5768-5560 zone to finish off a larger wave c off of the highs.
If we do move lower and are able to hold over the 5560 zone then we will look to see if we can still push higher as part of the final wave v up to new highs. We will however still need to be cautious of a larger degree top already being in place if that 5560 level breaks.
If we are able to move back over today's HOD followed by a break over the 6032 level then we will have an initial signal that we have bottomed in the green wave b. We will however need to see that followed up with a full five up off of the lows to further confirm that a bottom may indeed be in place.
