$ES: Can Bulls Start a New Rally?

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$ES #ES-mini #Elliott Wave #breakdown #failed breakdown

The first takeaway from the sharp drop we got yesterday is that bulls failed to close a day under 5,809, the critically important support yesterday. One battle got lost but that does not mean bears won the war.

ES-mini 135 min chart

We still can consider the Feb 25 drop as the second leg down in a flat corrective (a) down, (b) up, (c) down structure.

To trigger that bullish scenario that allows bulls to start a big leg up off that flat (a)-(b)-(c) down consolidation, bulls need to push ES over 5,809 and close a day and the week there.

For the bullish scenario its very important for bulls not to allow bears to violate the invalidation level 5,724. Yesterday the drop stopped 25 pts off that level.

đźź© As long as bulls hold ES over 5,724 and then push ES over 5,809 bulls will confirm the bullish setup with potential of another big rally to a new all time high.

(ii) Bearish scenario:

If 5,724 level gets violated then the chances of another big rally would drop by 90% to 10%.

But even if that happens it does not mean ES would drop like a rock.

But 5,724 – 5,696 is a very very very strong support. And that means we will most likely get another bounce driven by short covering after test of 5,700. So that gives us a similar trading plan to the one that played out really well yesterday:

Break under 5,724 would mean ES is going to undercut 5,700 level. Then we would wait for a bullish reversal and reclaim of that key support 5,724. That should trigger a strong short covering rally that can go to 5,800.

AFTERNOON UPDATE, 1-16 PM EST

ES-mini 10 min

we got a super deep a-b-c down retracement that can be counted as a micro wave ii down. That i up, ii down long setup allows bulls to start a new big rally.

The immediate resistance is 5,850. Protective stop can be placed under 5,750.

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