$ES #ES-mini #trading setup #Elliott Wave
That made me come up with a bullish wave count for ES-mini futures that allowed bulls to push to 4,385:
Now let’s zoom-out to a 240 min chart before we dive deeper and review a micro structure of that rally on Monday:
Let’s measure the previous large decline that lasted about four weeks from mid Feb’23 to mid Mar’23 (labelled as -y- of (y) down) and add negative extensions, potential strong resistance levels that may stop this rally. We get two main resistance levels:
- the level 1 is a negative 123.6% ext = 4,384.50. That level got hit today!
- the level 2 is a negative 138.2% ext = 4,443.25.
When price hits a macro target the main question becomes whether we can count full micro waves inside the very last push higher labelled -c- of (y) (se a wave count inside the blue rectangle on the chart below).
Even though we can count five micro waves inside the blue rectangle we have a problem with that count because the micro wave iii up stopped at 100% ext and the wave v up stopped at 138.2% ext.
The most conservative criteria for a wave iii up is hitting a 138.2% ext of a micro wave i up.
Therefore, we can come up with a more bullish wave count. It is possible to count the high made today as the top of a micro wave iii up:
That micro count argues for a pullback in a micro wave iii up followed by an a-b-c down consolidation in a micro wave iv down followed by the final rally in a micro wave v up targeting a very strong confluence of fibs at 4,440sh.
Note that 4,383 is a 61.8% retracement of the whole decline off the Jan 22 top. Millions of trades watch that 61.8% retracement level but this is probably why that level is not important anymore.
Take a note that a 66.7% retracement fib (4,447) is a much stronger and more important retracement fib. I call that level the last line of bears’ defense. A 66.7% retracement of a decline is a red line that divides a strong corrective pullback from a new impulsive leg up targeting a new higher high.
In addition, a negative 138.2% ext also points to 4,443. The negative 138.2% ext is a typical target for the second leg up (wave c) in corrective a-b-c structures.
Coming back to that micro count of five waves up inside the final leg up of a subwave -c- of wave (y), today ES has hit a 138.2% ext of a micro wave i up, an acceptable target for a micro wave iii up.
If bears manage to stop that rally here, then produce a corrective a-b-c consolidation in a micro wave iv down that would be a long setup to ride another push higher in a micro wave v up targeting a 176.4% ext of a micro wave i up = 4,452.
The invalidation level that has to be broken by bears to confirm that bullish path is 4,218, a low of a subwave b down of a wave iii up.