$ES: the Rally Has Hit the Red Box

$ES #ES-mini #trading setup #Elliott Wave

I count that rally as a subwave -c- of wave (b) up that has tagged the lower edge of the Red Box. The subwave c of wave (b) is a culmination of a short covering rally.

I expect that rally to fail at or inside the Red Box and then another leg down in a subwave (c) of wave (iv) down that at least should test the upper green zone but can extend lower down to the lower green demand zone as shown on the daily chart above.

Let’s zoom in to a 30 min chart:

There are two main resistance levels that form the Red Box:

a 66.7% retracement applied to the preceding decline = 5,209. That level is being tested tonight, and

a stronger, 76.4% retracement = 5,245

So we can not exclude possibility, that this strong short covering rally to extend up to the upper edge of the Red Box = 5,245.

If bears stop this rally at or inside the Red Box we should expect the second leg down in a subwave (c) of wave (iv) down (see the Daily chart above).

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