ES: Most Likely Bears Lost this Battle but they Have the Very last Chance

  • CastAwayTrader
  • April 2, 2023
<<< Back to All Updates
<<< Macro Updates

$ES #ES-mini #trading setup

Let’s review the bearish count and I will explain why that count can not longer be considered a high probability primary scenario:

ES 30 min chart

The bearish count considered the high made in Feb 2023 as the top of a large corrective wave (B) up. According to that wave count the -a-b-c move down wave a wave (w) down to be followed by a corrective bounce in a micro wave (x) up.

Based on years of practice and tens of thousands of wave counts I figured out my own rule of thumb that says that we can consider a move up as a countertrend corrective move as long as it stays under 66.7% retracement of the preceding move. In that case it was 4,109. I could tolerate a spike over that level if that spike gets faded into close leaving a long wick on a daily candle. But we did not get a fade into Friday close. Instead we got a spiky move up.

In theory the bearish count is still possible. If bears miraculously pushed ES under 4,109 that would let us ignore the Friday spike. If that miracle does not happen we still will be able to consider that bearish count as long as bears keep ES under 4,150.

What makes me doubt bearish scenario at this point is that the most important market breadth indicator turned up last week:

That confirms change in trend at least for short term perspective.

This is how a bullish scenario may look like on Daily chart:

ES Daily chart

That flat (a)-(b)-(c) up consolidation is the hallmark of my favorite corrective A up, B down, C up structure:

ES-mini Daily chart

Below I will show you a couple of examples of that same structure that played out in 2022:

ES-mini 240 min chart, case study of a corrective bounce in June – August 2022

here you can see the very same flat -a-b-c- down consolidation in between of two legs up

ES-mini 15 min chart, case study of a corrective bounce in Jan – Feb 2022

If ES keeps following that same fractal we may expect a five wave up rally coming out of that flat corrective (a)-(b)-(c) down structure.

This is how that five wave up rally looked like in July – August 2022:

ES-mini 60 min chart, case study of a corrective bounce in June – August 2022

The subwave -a- of wave -ii- up topped at 100% ext of a micro wave -i- up in July 2022.

If ES follows that bullish path then it has to stretch at least to 4,175 before we get a pullback back down to 4,110-4,100.

This is a micro path for that rally:

ES 30 min chart, potential bullish path

In conclusion:

(i) my preferred breadth indicator confirmed change in trend on Friday; and

(ii) extension of that rally to 4,175 – 4,1900 would confirm the Bullish scenario and will make the bearish one very improbable.

(iii) a pullback from 4,140 – 4,150 down to 4,110- 4,100 would keep the bearish scenario alive. However, as long as bulls hold ES over 4,110 the probability of that bearish count will be low.

(iv) Bears need to produce a daily close under 4,080 to break neck of the bullish count and make the bearish count our high probability primary scenario again.

Subscribe to Free Updates

Get Unlimited Access

PrevPreviousES: Bears Have a Setup to Turn ES Down
NextNQ: Has the Corrective Rally Topped?Next

More To Explore

$BTC: Attractive Breakout Setup in Bitcoin

$BTC $BTCUSD #Bitcoin I am watching an attractive long setup forming before our eyes: BTCUSD 120 min chart I expect

CastAwayTrader July 1, 2025

$SPX: Corrective Pullback is Expected

$SPX #SPX500 Today marks the first trading day of a new month. Let’s see if volatility returns to the market

CastAwayTrader July 1, 2025

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