$ES: Be Prepared for FOMC-Driven “Pump-and-Dump” Setup?

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#FOMC #ES #corrective (a)-(b)-(c)

The ES-mini bounced off the early April low in a three-wave corrective structure.

So far, wave (c) — the second leg up — has been unusually short, reaching only the 76.4% extension of wave (a), with the full 100% extension target at 5,832.50.

This raises a red flag: in a typical corrective move, wave (c) usually exceeds wave (a) in length.

ES-mini 120 min chart

🔹 Current Price Context:

  • ES remains stuck within its Monthly Opening Range:
    Support: 5,601
    Resistance: 5,724.75

Month Opening Range, ES-mini

Bears failed twice to break the 5,601 support — a sign of weakness in bearish momentum.

The next short-term resistance is the top of the Monthly Range at 5,724.75. A break above this level could ignite an extension of wave (c) up to the full target at 5,832.50.

🔹 Micro-Level Support to Watch:

  • Key intraday level for Wednesday: Daily support at 5,655
    • A break back above 5,655 would signal a bullish failed breakdown setup, possibly catching bears offside and fueling a squeeze higher.

📌 Key Catalyst Today: FOMC at 2:00 PM EST

  • With the FOMC rate announcement looming this afternoon, the market is vulnerable to a “pump-and-dump” scenario:
    • A spike higher on the headline (possibly toward 5,724.75 or 5,832.50),
    • Followed by a sharp reversal if the rally proves to be FOMO-driven and unsustainable.

✅ Conclusion:

  • The current wave structure remains corrective, not impulsive — and wave (c) up has underperformed so far.
  • Bears missed their chance to confirm the bearish reversal yesterday, failing twice to break the key 5,601 level.
  • If bulls reclaim 5,655, they may trigger a bullish breakout toward 5,724.75.
  • If bulls manage to break the Monthly Resistance 5,724.75 they would turn the monthly trend up and open the door for extension with the target 1 at 5,832.50.
  • However, this move could be a bulls’ trap if it unfolds into a FOMC-fueled spike, followed by a sharp reversal back under 5,724.75

⚠️ Trading Bias:
Cautiously bullish into FOMC with tight risk control. Watch for a reversal signal after the 2:00 PM announcement to fade any overextended rally.

Break under 5,601 would confirm completion of a corrective (a)-(b)-(c) up bounce and potentially start of a new large leg down.

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