The majority of traders who use Elliott Wave theory continues to expect ES-mini to start a very strong decline:
That super bearish scenario is a feasible scenario indeed.
There is one more path to a lower low that also makes sense:
Under that Scenario 2 ES-mini may drop to 3,570 and find a temporary support followed by a corrective (a) up, (b) down, (c) up structure of subwave B up of wave 5 down.
But when everybody expects immediate breakdown I try to find an alternative least expected scenario because this is how the market normally works. It follows such a path that makes it most painful for both parties, bull and bears. This is why we have so many violent bear market rallies. They make life hard even for perm-bears.
This weekend I did not post that variation of the “3-3-3” down scenario. Now it looks very reasonable:
Under that count ES-mini should drop to 3,560 or even make a lower low (preferred count) under 3,502 (the low made on Oct 13th) only to quickly reclaim it and trigger a high probability “failed breakdown” setup and start another rally in subwave (c) up of wave Y of (B) up targeting the Red Target box.
GDX played a very similar pattern in Nov 2021:
Look at the rally in subwave (c) up:
Here you see two hallmarks of any bear market rally.
We call the bear market rally a move up in subwave (c) inside a corrective (countertrend) (a) up, (b) down, (c) up structure.
Those two hallmarks of a bear market rally are:
(i) it normally has a clean five wave micro structure. Look at those -i-, -ii-. -iii-, -iv-, and -v- labels, and
(ii) As any five wave structure, it has to start from long -i- uip, -ii- down setup where wave -ii- may come as a painfully deep pullback.
Only after wave -ii- down makes a higher low the market normally takes off in a wave -iii- up.
Note that subwave (b)down may easily make a slightly lower low under the starting point of subwave (a) up, the first leg up.
On a micro level ES-mini looks having topped in a corrective structure and looks ready to turn down today:
We can count enough micro waves to make a topping case.
Bears have a clean micro -i- down, -ii- up setup.
Alternatively we can count it as -a- down, -b- up setup.