$ES: Bulls Needs a Base for Another Rally

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$ES #ES-mini #long setup #consolidation

Today is the second trading day of a new month, a traditionally volatile three day period when the market expands the range that normally creates boundaries respected by the market during the following four weeks.

The macro count is bullish and allows bulls to produce a five wave up rally off the last low made on Nov 21st:

ES-mini 120 min chart

nside a five wave up rally we normally have at least three major pullbacks / consolidations:

those pullbacks are wave 2 down, subwave B down of wave 3 up and wave 4 down.

Read more on that subject here:

Quite often, in the course of a strong up trending market, those corrective waves may come not as a deep pullback retracing 66.7%-76.4% or even 85.4% of the preceding rally but as a flat and shallow a-b-c structures that retrace only 33.3% of the preceding rally.

The first move up off the low made on Nov 21st is supposed to be followed by an a-b-c down consolidation:

If we zoom in to a 15 min chart we can come up with a micro count (identical to the one in NQ mini I will share below):

ES-mini 15 min chart

We could consider the Friday high as the top of wave -i- up but the bearish reaction was very weak. That makes me consider an alternative scenario where the rally still has not topped. That wave count allows bulls to make one more push higher to the Red Box.

Yesterday we got fresh Weekly levels:

So far bulls have not been able to break over the weekly resistance 6,850.

Break over that level would trigger a short covering rally to weekly R1 level of resistance = 6,893.

We can come up with a similar micro wave count for NQ-mini:

NQ-mini 15 min chart

Bulls have already broken out over the weekly resistance in NQ:

That breakout opens the door for extension of the rally up to the weekly R1 level = 25,692.

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