$ES: A Short Squeeze Rally Extended the Bounce

  • CastAwayTrader
  • November 1, 2023
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$ES #ES #trading setup

Afternoon update, 2-40 PM EST

Afternoon update, 3-50 PM EST

Yesterday bulls completed a double three corrective structure, a combination of two a-b-c up structure.

Bears had a chance to start a new leg down but failed. When such failure happens a bounce extends adding another a-b-c up move:

ES-mini tick bar chart

Now we can see a triple three corrective structure that could get completed with an emotional spike this morning.

“…”The textbook resolution of a bearish ascending wedge is to play a fake breakout followed by a brutal reversal, followed by drop back into the wedge and then a drop under the lower trend line”…”

To trigger that bearish wedge bears need to push ES down under 4,212 to break under the blue trend

line.

Let’s zoom out to a 120 min chart:

ES-mini 120 min chart

I continue to consider this move up as a corrective wave b up to be followed by a decline in a wave c down.

AFTERNOON UPDATE, 2-40 PM

Bears need to break under the blue trend line to confirm completion of the bearish wedge:

ES-mini tick bar chart

Afternoon update, 3-50 PM EST

The market defies gravity and lack of ANY good news. And despite my conviction in bearish resolution it keeps pushing higher.

Let’s look at a 120 min chart

ES-mini 120 min chart

As long as bears hold ES under 4,273 we will be able to count that rally as part of a corrective structure.

Break over that level would invalidate the bearish scenario and prove my bearish bias wrong.

If we look at the daily chart of S&P we will see this rally as a perfect bounce to the broken 200 Day Moving Average:

SPX Daily

For ES-mini futures 200 Daily MA is 4,267.

The broken support should now work as a aresistance.

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