Tuesday’s action was almost a picture perfect replica of what we saw last Thursday. Is that a clue that we are going to get the same follow-through afterwards? If so, it would suggest another trip back towards 1680 from here, but again we are left with multiple possibilities on the chart at this time.
Unfortunately, that is what happens when you are trying to navigate such a choppy market. Good for scalping, but treacherous for anyone trying to position for swing trades. So far, price failed to break through the declining trendline beginning from Thursday’s high, which allows for the possibility of a b-wave triangle still. This would fit with a decline back towards the 1680 region.
If price does manage to break through the TL resistance, and then through 1697, it will meet more resistance immediately above at 1698, which represents the 1.00 extension of Monday’s rally and the 1.382 extension of last week’s rally. Above there and a clear path to a new high, with an ideal target of 1717, becomes much more likely.
Until then, price has some serious hurdles to overcome before we can see any sizable continuation to the upside from today’s low. Next major stop above the resistance is going to be around 1710, which would likely send price back down to the breakout point at 1698 before a final vth wave to the 1717 target. Support below aside from the 1680 region is going to be the original 1670 and then 1660.
Originally published on ElliottWaveTrader.net, by Garrett Patten.