$ES #ES-mini trading #trading setup
As we expected, ES pushed lower under 4,000 on Wednesday.
Here we can outline two bearish scenarios. There are only minor differences between two scenarios.
(1) the Bearish:
Under the bearish scenario ES bottomed in a micro wave iii down today and rallied in a subwave a of a corrective wave iv up. An a-b-c up pullback into the Red Box may top tomorrow and should be followed by another flush down on Friday or Monday targeting the fat green demand zone.
Under the (i) bearish scenario that corrective structure ca be completed on Thursday and we will get another drop to 3,930 – 3920 on Friday or Monday.
Please note that even under the bearish wave count that decline to 3,930 – 3,920 should be followed by a large corrective a-b-c move up in a wave -ii- up that may play the next week.
(2) the Bullish scenario:
The short-term Bullish scenario allows bulls to burn more time for that larger corrective zig-zag. The bullish scenario does not allow bears to push ES much lower under 3,985 before that large corrective structure of the subwave -b- up of wave -iii- down gets completed.
For both scenarios there are the same two main resistance levels: 4,048 and 4,060.
Both scenarios argue for continuation of the move down upon completion of a corrective a-b-c up pullback.
The main argument in favor of the short term bullish scenario is that SPX and SPY hit support of 50 MA on Weekly and Daily:
