$ES #ES-mini #trading setup #Elliott Wave
If we examine a micro structure of that decline we will see it is structured as a complex corrective (w)-(x)-(y) structure, not a trending five wave down structure:
That implies bulls can start another leg up upon completion of that pullback.
Let’s now zoom-out to see two macro scenarios, a bullish and a bearish.
(1) the bullish “one-more-push-higher” scenario:
This bullish count will be valid as long as bulls hold ES over 4,306.75. We can consider that leakage as a micro wave iv down to be followed by another rally in a wave v up.
However, of bears violate that level that would be a solid confirmation that ES made a lasting top in mid June.
(2) the bearish “the top is in” scenario:
That non-stop leaking is a good argument in favor of the bearish “the top is in” scenario.
To confirm that ES actually made a lasting top we need either a break under 4,306.75 or a corrective a-b-c up bounce making a lower high followed by a breakdown under the low made by this first push lower (so far the low was made at 4,368.50.
Under the bearish count bears got a setup for a large decline in a wave (C) down targeting new lower lows (under the Oct’22 low). Normally an accelerated part of the decline starts after three consecutive lower highs.
ES Daily Support-turned-resistance for Tuesday is 4,381.50.
If bulls manage to reclaim that level we would most likely get a quick short covering rally to 4,408 (see the first chart above).