Tuesday, 7/10/12 update

Today's selling in the ES put in a low of 1330.50 which is right at a couple of fibonnaci levels:  the .618 retrace of the Minute W1 rally from 1302.50 to 1375 is at 1330.25, and at 1329.75 Micro Wave "c" of the three legs since the 1375 top is .786 x Micro Wave "a".  So nice fibonnaci symmetry, assuming that today's low is the extent of the selling and that the market moves up from here.  But the ES is getting perilously close to the 1317 level mentioned in the Sunday update as a red flag for the bull case.  Under Elliott rules the current selling could run all the way down to one tick above the 1302.50 low of Jun 25 and still be a valid 2nd wave, but that scenario is pretty unlikely.  Today's action certainly put the market in an oversold condition, so some type of bounce is warranted in the immediate future.  If the bullish case is valid that bounce should develop into a sustained up move.