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Saturday, April 19, 2014

Saturday, 4/19/14 update

Coming into last week there were several short term possibilities for the ES, two of which saw the pattern from the Apr 4 ATH as the beginning of a corrective series that had laid down a pattern of nested 1st & 2nd waves.  However, the rally from last Sunday evening's low has retraced almost all of the two day drop that preceded it.  So the only viable possibility for the idea of a continuation of the sell off that started on Apr 4 is that of a 1st wave bottom on Apr 8 followed by an irregular flat 2nd wave that is almost complete, as per below:

   
This idea is certainly possible, but the ES/SPX was oversold enough as of the Apr 13 low to support a more extended rally then we've seen to this point.  So that leaves the more immediately bullish option as the current preferred alternate.  That alternate has an ending diagonal in progress since the early February low:



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