$ES #macro #trading setup #breakout
In the previous update we outlined two scenarios. The bullish one seems having prevailed:
On Feb 2, 2023 bulls completed a corrective Double Three structure of a rally that started off the mid Dec’22 low. Bears got a chance to start a new leg down. But all what bears could produce was a 30% retracement of the rally shaped as an a-b-c down (labelled as -xx-).
Quite often, when the correction does not achieve its ultimate goal, which is to switch to opposite the prevailing market sentiment, the attempt to change direction and start a new leg down quickly fails. That failure happens probably because too many traders considered that bearish scenario and expected that decline.
The beast nature of the market is that it never does what the majority expects no matter how reasonable it is.
When a double three corrective structure does not turn bears into bulls, it quite often morphs into a more complex Triple Three structure. That means that the rally extends higher by adding another a-b-c up or a micro w-x-y move.
The market climbs upon wall of worry. The moment when the last perm bear throws in the towel and goes long will be the moment when the last buyer buys and no more buyers will be left to keep pushing the market higher.
the rally that broke out of a mini triangle today is capable of extending up to 4,240 (76.4% ext of the wave -w- of (y)).
The immediate support is 4,100. If bears manage to violate the 4,100 support that bullish scenario will be dead.