$ES #ES-mini #trading setup #Elliott Wave
In my evening update yesterday I noted that the drop can be counted as the final subwave -e- down that normally creates a bears’ trap that once closed provides fuel for a strong short covering rally:
The idea behind that bears’ trap / failed breakdown setup is simple. Note that the drop undercut the previous low made by the subwave c- down that bottomed at 5,582.75.This is where all retail traders set protective stops for long positions.
What algos do is that they deliberately push price down to undercut that low to trigger all those protective stops. Automatically triggering stops add liquidity and allows algos to cover shorts. I guess at some point that type of action will be officially declared a criminal act.
As a result of that exhaustive drop down to the Green Demand Zone the corrective wave -iv- down got completed and Bulls got a long setup to push ES-mini to a new higher high in a micro wave -v- up.
That long setup allows bulls to produce an impulsive five wave up structure targeting the red Box (starting at 5,710).
The bigger picture remains the same. Bulls need to make one more push higher to complete a subwave (a) of wave (v) up, see the chart posted last week:
