Based on the structure at the moment, the current formation appears to be transitioning into the second leg of Wave B which often looks like a minor retrace of a formation. A higher low and push to the 6930 to 7330 is what I am anticipating as the next move for this market.
Like I have been writing about, this is a tricky formation. It does not have to go as high as 6930, it may fail sooner. Or it may go slightly above the 7330 and then fail. There is no way to predict that movement for sure, the best I can do is forecast that as one possibility out of many. The key to using this information is being prepared IF the market chooses this outcome.
In terms of day trading, I think there is a good opportunity for longs with a relatively small stop (70 to 100 pts while aiming for a 150 to 200 point target). In terms of swing trades I am open and flexible to go long IF price can retest the 6050 level and show a reversal formation on a smaller time frame (1 hr or 30 min). That offers more attractive reward/risk in my opinion for longer time frame strategies (multi day is long for this market).
A break below the 6k to 5800 area (.618 of the current swing) will signal that prices are likely going to break the 5400 support and retest the high 4ks (especially if there is a lower high established around the current levels).
I keep repeating this because I think it is easy to forget when prices are moving: you must be nimble. That means recognize change and adapt quickly. It is a day trading mindset which has no room for opinions. If you are slow to move, or stubborn, or don't have a clear trading plan with stops and targets predefined, then you really should not be trading this market at all.
My plan is simple: Buy the failed low and attempt to capitalize on the retest of the 6900 area. I am flexible, I have no opinions and no ego. To me, it is not about being right, it is about recognizing when variables are lining up that are in line with my plan, and recognizing when they are not and adjusting to that information. It is hard to share this thought process in real time because the market makes its moves when it makes them, and I am not in front of a computer 24 hours a day to write about it. This is why I always say you must learn to think on your own and use analysis like this for context and perspective to help confirm and adjust your own independent interpretation.
In summary, the current retrace in this market is not poised to go back to 8k (at least not yet). B Waves often attract a lot of traders thinking they are buying a pullback, but in reality it is setting up for a much broader wave (C Wave). That is the way the structure is unfolding at the moment and it can change. I have written about this situation before only for the market to consolidate and break out to new highs. What makes this situation different from those previous environments is there are 5 clear waves complete which on this magnitude implies a much broader correction or consolidation at least. Don't get stuck on feelings and opinions in this market, it is too fast. TA is your best friend when you need speed, but you have to know it well. An on a 15 minute chart is not going to help you unless you know how to interpret it within the context of the price action going on around it.
Comments and questions welcome.