ES: A Crispy Clean Diagonal Wave Count

<<< Back to All Updates
<<< Macro Updates

$ES #ES-mini futures

I found a really clean wave count that can be used for forecasting the next big move in ES-mini.

Let’s first start from our primary bearish wave count on a daily timeframe:

ES Daily chart

You can see that this rally started off a low labeled by red letter w.

Note that even if ES pushes up to 4,109 it will hit a critical resistance of 66.7% retracement of the decline off the Feb’23 high.

Now let’s zoom-in to see micro wave structure behind that move up:

ES mini, 13,500 tick bar chart

The move up off the mid March low is shaped as a combination of several a-b-c structures. We can count it in a bearish way as a complete w-x-y structure (see purple labels).

Alternatively, followers of traditional Elliott Wave theory calls that pattern the diagonal. It is either an Ending Diagonal that will be followed by a new macro leg down, or that is a Leading Diagonal, a wave ( i ) up of a new five wave up rally.

In both cases a completed diagonal is normally followed by a quick retrace of substantial part of that rally.

There are two main support levels/targets for the retrace:

– 66.7% retracement = 3,935, and

– 76.4% retracement = 3,907

Normally inside that type of a structure which I also called the compressed five wave move wave -iii- tops at 138.2% ext and the wave -v- up tops at 176.4% ext.

However, quite often (roughly in 50% of cases) the fifth final wave extends to 200% ext of the wave -i- up.

Therefore we can get the final spike up to 4,096 (176,.4% ext) with potential spike up to 4,127 (200% ext).

Tomorrow we will get PCE data scheduled to be released at 8-30 AM EST. That PCE may trigger the final spike into the Red Box and reversal. Alternatively we can get the final spike on Monday open triggering a Weekly Overbought signal on Monday open.

Upon completion of that rally into the Red Box I would expect a strong decline targeting the green retracement zone.

Subscribe to Free Updates

Get Unlimited Access

More To Explore

Important Disclaimer

CastAway Trader LLC, the publisher of this web-site and videos is not registered as an investment adviser nor a broker/dealer with either the U. S. Securities & Exchange Commission or any state securities regulatory authority. Users of the website www.castawaytrader.com and viewers of the videos are advised that all information presented on the website is solely for informational purposes, is not intended to be used as a personalized investment recommendation, and is not attuned to any specific portfolio or to any user’s particular investment needs or objectives.

Trading stocks, options, or futures carries a high level of risk, and may not be suitable for all investors. Before deciding to trade, you should carefully consider your objectives, financial situation, needs and level of experience. CastAway Trader LLC provides general overview of trading methods that does not take into account your objectives, financial situation or needs. The content of this website must not be construed as personal advice. All trading setups and/or trades presented in the web site and/or trading chat room by CastAway Trader an/or by other members of the chat should be considered hypothetical for educational purposes only and should not be expected to be replicated in a live trading account.

An investor could potentially lose all or more than the initial investment. You should not speculate with capital that you cannot afford to lose. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Risk capital is money that can be lost without jeopardizing ones’ financial security or life style.

You should be aware of all the risks associated with trading. You should seek advice from an independent financial advisor.

Any information posted on this web site is not to be construed as an offer to sell or the solicitation of an offer to buy, nor is it to be construed as a recommendation to buy, hold or sell (short or otherwise) any security. All users of the website must determine for themselves what specific investments to make or not make and are urged to consult with their own independent financial advisors with respect to any investment decision. The reader bears responsibility for his/her own investment research and decisions, should seek the advice of a qualified securities professional before making any investment, and investigate and fully understand any and all risks before investing. All opinions, analyses and information posted on the website are based on sources believed to be reliable and written in good faith, but should be independently verified, and no representation or warranty of any kind, express or implied, is made, including but not limited to any representation or warranty concerning accuracy, completeness, correctness, timeliness or appropriateness. In addition, CastAwayTrader LLC and its officers and employees undertake no responsibility to notify such opinions, analyses or information or to keep such opinions, analyses or information current. Also be aware that the owners, officers and employees of the web site www.castawaytrader.com may have long or short positions in securities that may be discussed on the website, Premium Trading Chat room and/or in the videos posted by CastAway Trader LLC.

Past results are not indicative of future profits.

Subscribe to Free Updates

Get Unlimited Access