$ES #ES-mini futures
This morning I sent out a note to share my bullish expectations for a push towards 4,200. The market has been steadily climbing throughout the day:
According to my count the move up off the March 2023 low has a clean three wave structure. Therefore I consider it a part of a large corrective structure.
Let’s zoom in to find out what we can expect after that rally gets completed at or near the Red Target box.
There are two ways to count that overlapping whipsaw consolidation off the October 2022 low:
(1) Less reliable topping count:
That wave count assumes that the high made in February was the top of the (w)-(x)-(y) up structure of a large corrective wave B up. The problem with that count is that the second leg up labelled as the red (y) up was much shorter than the first leg up labelled as the red wave (w) up.
In addition, this rally is labelled as a corrective wave (x) up. But it stretched too far for a typical wave (x) up.
(2) Alternative scenario that looks much better:
Ideally the red wave (B) up should be composed of two legs / waves of proportional size (see two green boxes). The leg up highlighted with the left green rectangle had a clean a-b-c micro subdivision. The move up off the March low also has a very similar a-b-c subdivision. It is possible for that leg up to stretch and stop at 76.4% ext of the first leg up = 4,300.
But the first leg up in the left green rectangle had two legs up.
And the move up off the March low has a similar size to the first part of the move up off the October 2022 low, labelled as the black -a- up. That first leg up labelled as -a- up was followed by a sharp decline in a subwave -b- down that retraced 50% of the preceding rally.
In that case 50% retracement = 4,026 (provided that this rally extends up to 4,213, to tag the horizontal red trendline that stopped so many swings). This count allows bulls to push ES-mini higher tomorrow, to 4,200 – 4,210. Then that count argues for a 200 point pullback in a subwave -b- down.
ES Daily Resistance (turned support) for Friday is 4,161.
As long as bulls hold ES over that level the Secondary resistance reserved for strong rallies is 4,208.
Those levels are calculated by my Cycle Trader Indicator for TradingView.
This is an example how you can use those levels in day trading:
Finally, we will get powerful catalysts tomorrow pre-market when several huge US banking institutions report earnings:
In contrast, if they report well we will get a spike over 4,200.