ES: The Tricky Path Higher

$ES #micro #macro #trading plan #trading setup #es-mini

This is how the big picture looks like:

Bulls are trying to break out over the declining red trend line.

Everybody expects a strong rally triggered by successful breakout over that line. But that path higher could be much trickier.

I count the whole move up off the mid October 2022 low as a corrective three way pullback labelled (w) up, (x) down , (y) up.

Each of those waves is subdivided into three smaller waves.

The last important low was made by wave (x) down in late Dec 2022. I expect another three wave -w-x-y- up move.

We have already completed two waves out of three waves that comprise the red wave (y) up. The first leg was a rally that topped in mid January 2023. The second quick leg down was a subwave -x- down that bottomed at 3,963.25 on Jan 25, 2023. Off that low we should get another w-x-y up structure that would be composed of four legs up.

Currently we are in the leg up number 2 out of four legs.

ES is approaching into the yellow box. This is where wave w of -y- can top. Then we could get a deep a-b-c down structure that will push price back down to 4,000. we can get that wave x down either before FOMC or after FOMC next week

Then we will get another push higher to 4,180, to re-test the Dec’22 high in subwave a of y of -y-.

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