$ES: Tracking Inverse Head & Shoulders Long Setup

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$ES #ES #Elliott Wave

First, please note that Tradestation, the platform I use for charting, automatically switched me from expiring ES-mini March contract (ESH25) to a new June 2025 contract (ESM25). That means all the levels have changed:

ESM25, 240 min chart

Last week ES-mini dropped to a very strong milestone support 5,579 (for the ESM25 contract). We have been tracking either a corrective or an impulsive move up off that level.

ESM25, 30 min chart

We have got a clean five wave up micro rally off the low that topped on Friday afternoon. I count that rally as wave -a- up.

I would like to get one more push lower to complete a corrective a-b-c down structure off the Friday afternoon high. That would be my wave -b- down. This pre-market spike up can be counted as a micro subwave b up of the wave -b- down.

The key level of resistance is 5,796, the broken Monthly Support. This is where bulls will face the real test of their intentions. Even under the bullish case that allows bulls to produce another five wave up big rally targeting a new all time high that 5,796 level may stop bulls for a while. For instance, this is where a wave (i) up can top and a deep corrective wave (ii) down may start.

But to get to 5,796 we need another impulsive move up which, in its turn, requires a proper base.

This si why I would like to get one more push lower to complete a corrective a-b-c down structure off the Friday afternoon high that we will be able to count as a wave -b- down setting the stage for another leg up in a wave -c- up targeting 5,796.

Note that 5,705 can be considered a neckline of a bullish reversal Inverse Head and Shoulders. To complete that bullish pattern we need bears to push ES down again to draw the right shoulder.

THE NOON UPDATE, 11:57 AM EST

The Bullish PLAN A:

We have got a slow leaking decline re-testing the morning breakout. So far it looks very bullish like a subwave c down of a wave -b- down shaped as an uber bullish Running Flat corrective structure. Bulls can start a new leg up from here targeting 5,800 (June 25 contract)

ES-mini 30 min chart

No PAIN NO GAIN PLAN B:
If bulls fail to defend the 5,685 support then we will get a panic driven shake out drop down to 5,638 or even down to 5,615 (the green demand zone). That would be a proper Right Shoulder of the bullish reversal Inverse Head and Shoulders pattern.

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