$ES #ES-mini #Elliott Wave #trading setup
The previous update correctly predicted an upcoming rally.
We keep watching two very different macro scenarios. They have very different expectations for 2024 but both argue for an upcoming move down in the 1Q 2024.
Let’s start with the Very Bullish macro scenario:
Under the Very Bullish scenario ES is about to complete a micro wave i of (c) of ( iii) up.
That micro wave i up should be followed by a corrective wave ii down that may find support at 4,400.
In addition, we have to keep watching an alternative bearish scenario that considers this Nov’23 rally as a corrective subwave (b) up that should be followed by a strong 600 point flush down :
Let’s zoom in to check a micro structure behind the Nov’23 rally. That should help us to pinpoint its top and plan to go short:
This is the the first half of Nov’23 rally:
…and its continuation into the beginning of December:
ES-mini has been in a flat (w)-(x)-(y) down consolidation for almost two weeks.
Bears failed to start any meaningful move down. As a result of that failure bulls got a flat foundation to star a new leg up in the final wave (v) up.
Let’s zoom in again.
The toppying micro scenario 1:
At the very least I would expect bulls to make one more push higher to tag the nearest resistance = 4,617.
The main concern for that setup is that rally would stop two steps under the July high made at 4,634.50.
That would be a very unusual resolution to such a huge rally.
I really like the second alternative path that I call “the Fake Breakout triggering bears’ capitulation”:
This scenario makes much more sense to me because it will be completed with the final exhaustive rally.
A consolidation over 4,595 – 4,590 on Sunday night would be an attractive long setup to ride another push higher:
the target 1 = 4,617, and
the target 2 = 4,634.
If ES-mini manages to break over 4,617 that would confirm we are in the more bullish scenario 2.