$ES #ES-mini futures #trading setup
Under the most bearish wave count ES-mini has been leaking down off the top of a large corrective wave (B) up that topped in early Feb’23.
I call it the most bearish scenario because that wave count allows bears to push ES down in a five wave down structure inn subwave A o wave (C). If ES follows that count, the new lower low made on Friday could be the bottom of subwave -a- of a wave -iii- down. Its possible for bears to make a slightly lower low in 3,940-3,930 area before a pullback starts.
Upon completion of a corrective a-b-c up pullback in subwave -b- up of wave -iii- down the decline should accelerate in the strongest part of the decline, subwave -c- of wave -iii- down.
We can zoom-in to justify the Friday low completed a five wave down micro structure of the subwave -a- of wave -iii- down:
The ideal scenario is we get a complex -a-b-c- up structure next week pushing ES back up to 4,050-4,060:
Such an a-b-c- up bounce would be a corrective subwave -b- up of wave -iii- down.
That consolidation would be followed by a very strong decline in the strongest part of the five wave down structure, subwave -c- of wave -iii- down targeting 3,750.
There is an alternative much more bearish scenario:
The sharp drop we got on Friday and the weak bounce that followed makes me consider that bearish scenario. That scenario assumes that the subwave -b- up of wave -iii- down already topped last weak and the Friday drop was a micro wave i down of a new five wave down structure of the subwave -c of wave -iii- down. In that case, a corrective a-b-c up structure of a micro wave ii up may top at 4,000-4,010 and then we can get a strong decline in a micro wave iii of -c- of -iii- down that should violate 3,900.
When I doubt what scenario will play out in ES-mini I normally have a look at RTY-mini futures because it is normally much more hones and less vague than ES-mini.
RTY has a similar count to the first one I explained in that update. RTY could make a bottom of either a wave -i- down or a subwave -a- of wave -iii- down on Friday and that count argues for an upcoming corrective bullish pullback. On Friday RTY dropped to my Green Target box. Bears can make a slightly lower low to tag the Green Box before bulls step in and turn RTY up. However, I do not expect much of that bounce. We can expect only an a-b-c up structure into the Red Supply zone.
The first resistance is 1,916
Upon completion of a corrective -b-c up bounce RTY should drop hard in a subwave -c- of wave -iii- down.