$ES: Potential Short “Failed Breakout” Setup

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$ES #SPX #Elliott Wave

I am looking for an interesting micro bearish scenario:

ES-mini 120 min chart

The last major high was made by the top of teh subwave (a) of wave ( iii ) up on May 19.

Then we got a quick pullback that looked like a subwave -a- down (in a corrective -a- down -b- up, -c- down structure).
And then we got an a-b-c up move that took three times more time than the decline in the wave -a- down. Normally a corrective wave -b- up takes significantly more time than the first leg down in a wave -a- down. So it is possible that ES-mini has completed the corrective bounce in a wav e-b- up and is ready to drop in a wave -c- down. In that case we can get a strong impulsive drop down to the Green Box fueled by enforced closing of long positions opened by retail traders on a break over 5,999 on Friday.

Remember, the 5,999 level is the Monthly Resistance:

If bears manage to push ES-mini back under the Monthly Resistance 5,999 they will trigger that bearish “failed breakout” scenario.

Bears can test the Monthly Support 5,867.50 before starting another strong leg up in a subwave (c) of wave ( iii ) up.

But what if bears fail to break the resistance-turned-support 5,999 level? Now lets discuss a bullish contingency Plan B.

ES-mini 45 min chart

If bears fail to push ES under 5,999 overnight that would be a big failure of bears. As always, when one camp loses the battle we expect another camp to counterattack. A failure to break the 5,999 support will most likely be followed by a strong short covering rally with the target 1 = 6,080 – 6,095 and the target 2 = 6,168.

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