$ES: Sharp Drop is How the Ending Diagonal Gets Resoved

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$ES #Ending Diagonal

ES-mini got the final push higher in a subwave (c) of wave ( v ) up completed yesterday.

Note that the final five waves up came up in between of two contracting trend lines. Traders who practice the traditional Elliott Wave theory call that pattern the Ending Diagonal. That pattern gets resolved with a sharp drop down to the starting point of that pattern.

ES-mini 30 min chart

This drop can be counted as micro wave iii down that may find support at the first milestione support 5,928.

Then we can get a bounce in a micro wave iv up followed by another push down in a micro wave v down to 5,878, the green demand zone.

Note that the Monthly support is located at 5,867.50.

If we zoom out to a 240 min chart we can see that so far nothing dramatic really happened:

ES-mini 240 min chart

We got a five wave up rally off the April’25 low labelled as A of 5.

Once a five wave up structure gets competed we expect a corrective (a) down, (b) up, (c) down structure to follow. That would be a subwave B down of wave 5 up. A corrective (a) down, (b) up, (c) down should be followed by another large rally in the subwave C of wave 5 up targeting a new all time high.

Normally, the main target and strong support is located at the low made by the micro wave (iv) down of the completed rally. In that case that is 5,790 – 5,760.

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