Preferred Elliott Wave view suggests rally to 19770 completed wave (W) and wave (X) pull back is also proposed to be over at 18980 with a test of equal legs (100% Fibonacci extension). Move up from here is taking the form of a double three or (w)-(x)-(y) structure when wave (w) ended at 19590, wave (x) ended at 19285 and wave (y) higher is in progress. We have seen a new high above 19590 which reinforces this view. 0.618 – 0.764 ext of (w)-(x) lies between 19655 – 19744 and is the typical area for wave “w” of (y) to finish. This area is expected to produce a pull back in wave “x” which could retrace 50 – 61.8% of the move up from 19285. As the proposed “x” wave pull back holds above 19285 low, expect the Index to continue higher toward 19888 – 20032 area. As the pull back is represented with a dashed line accompanied by a green arrow, we don’t like selling the Index and expect the Index to find buyers in the dip in 3, 7 or 11 swings as far as prices holds above 19285 low and more importantly the pivot at 18980 low remains intact.
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