$ES #ES-mini #long setup #flat consoldiation
Our bullish wave count treats the low made yesterday as subwave (b) down of wave (v) up.
This interpretation means the bulls have a strong setup for another five-wave rally targeting the Red Box.
Yesterday I noted: “If we get a strong recovery back over 6,432, that would be a decent long setup for a 200 pts rally targeting 6,629”. Bulls keep following that bullish path:
ES-mini 240 min chart
📍 Key Level: The Red Box begins at 6,624.
Why the Current Setup Matters
Take a close look at the two yellow boxes on the chart.
This pattern is one of the best long setups the market provides from time to time.
What we are seeing is a flat consolidation following a strong push up:
- Wave -a- down
- Wave -b- up
- Wave -c- down
This corrective -a-b-c- down sequence is confined between two parallel lines — resistance at the top and support at the bottom — creating the rectangle you see highlighted in yellow.
The Power of the Flat
This type of flat consolidation is not just noise. It builds a solid base for a new impulsive rally, often strong enough to push toward a new all-time high.
Think about it this way:
- Subwaves -a- down and -c- down represent two failed attempts by the bears to reverse the up trend.
- That double failure significantly boosts the confidence of the bulls.
The result? A powerful springboard for the next upward impulse.
Let’s talk about micro structure.
Under the bullish scenario, we expect a five wave up rally. And the push up off the low made on Tuesday is a micro wave -i- up.
Note that the drop turned both the daily and the weekly trend down.
To turn the daily trend up Bulls need to push ES-mini over the Daily resistance for Thursday = 6,471.25.
To turn the weekly trend up bulls need to push ES-mini over 6,471.75.
If that push up off the Tuesday low is a micro wave -i- up, bulls most likely will not be able to break over the key resistance 6,471 level of resistance from the get go. We may expect a micro flat -a- down, -b- up, -c- down consolidation of a wave -ii- down.
published at 12:07 PM EST
We now have a clean five-wave rally off the Tuesday low.
This price action strengthens the bullish count, which allows us to treat Tuesday’s low as a major low.
Under this interpretation, the bullish scenario opens the door for a large five-wave rally to develop from that level.
Accordingly, we can count the initial move higher as micro wave -i- up.
What’s especially interesting is that the market has already traced out a micro -a- down, -b- up, -c- down corrective structure, which could represent micro wave -ii- down.
ES-mini 5 min chart
🔑 Positive Sign for Bulls:
This micro -a-b-c- down corrective move unfolded above the broken resistance of the declining red trendline, turning former resistance into support.
In conclusion, a break over 6,460 would confirm start of a new rally in a micro wave -iii- up.