$ES #ES-mini #trading setup #trading futures
The big picture is the Nov – Dec 2023 rally was a corrective subwave -b- up that managed to make a higher high. The strength of that rally makes me think we have been dealing with a very bullish Running Flat structure.
In the Running flat corrective structure a subwav e-b- up manages to meake a higher high and the final drop in a subwave -c- down becomes the shortest subwave that normally finds a support at 76.4% ext of the subwave -a- down:
We have been expecting a drop to the key support 4,736 since the end of December.
Last Friday ES-mini finally dropped to the target. That drop happened during the first three trading day of a month, a period when price often completes a quick and strong countertrend move. During the first three trading days of a month price establishes meaningful boundaries, the monthly resistance and the monthly support. The Monthly Support for January is 4,727.
As long as bulls hold ES-mini over the Monthly Support 4,727 they keep the bullish trend alive (see the black path on the chart above). If bulls defend 4,727 support we can get another push higher towards the negative -138.2% ext = 4,947 (see the black path on the chart shown above).
However, if bulls fail to defend that level we will most likely see a quick drop to the next Gann’s level, a 90 degree down off the Dec’23 high = 4,622 (see the red path on the chart above):
Note that ES dropped down exactly 45 degrees off the last high. 4,730 is a meaningful support.
If bulls fail to defend that level we will most likely see a quick drop to the next Gann’s level, a 90 degree down off the Dec’23 high = 4,622. Note that in that case price will test the upped edge of the unfilled gap up left on Dec 8, 2023.