Not much to write about in today's action: a ten point range. I think we are all aware that we are hitting up against significant long term resistance trends at this level. On the posted hourly chart, you can see that every time the hourly chart has touched the 34 SMA it has put in a higher low then previous break. This draws significance to yesterday's low (ES 925.5) because if we break that tomorrow, significant selling should come into the market. This would then set a chain reaction of a failed breakout of the previous triangle and bring to bear a full intermediate wave B.
There are two reasons why I don't think primary wave 2 is over:
- the time duration for a primary wave has been too short (~3mo compared to the nearly 18 month primary wave 1)
- the move off the high (so far) does not have an impulsive look to it; therefore, it is unlikely the start of primary wave 3.
But don't get me wrong, this wave B should scare the pants off the bulls at some point and lay the ground work for a more sustained move to the 1000 zone later this year.
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