$ES #ES-mini futures #trading setup
ES-mini continues to consolidate after a strong five wave down move that bottomed at 3,947.25 last Friday. We expected an a-b-c up corrective structure and that structure does not look having completed yet:
This move down can be counted as a subwave c of wave -b- down that ca be followed by a short covering rally in a wave -c- up.
ES has tested a support at 3,963. It can find a support right here and turn up or can extend a bit lower to tag the Green Box. In extreme bearish case ES may extend this decline to undercut the low made at 3,947.25 last Friday. Even in that case Bulls will be able to produce a rally into the Red Target box.
We are starting a new trading month tomorrow. Normally the first three trading days bring back volatility. Quite often we get a trending move in one direction during the first three trading days that will then get erased during the following 3-5 trading days.
Upon completion of that -a-b-c- up structure of the red subwave -b- up of wave -iii- down should be followed by a very strong decline in a subwave -c- of wave -iii- down.
Target 1 for decline in subwave -c- of wave -iii- down = 3,810.
Target 2 for decline in subwave -c- of wave -iii- down = 3,750.