$ES #ES-mini #macro #failure #invalidation
Under the straightforward bullish scenario, ES could still push higher in one final, exhaustive rally into the Red Target Box.
However, bulls have already attempted to ignite that move at least three times — in December, January, and February — and each attempt failed to gain sustained momentum.
ES-mini Daily chart
From a wave perspective, I have been counting the rally off the April 2025 low as the final Subwave C of Wave 5 up.
The second leg up extended slightly beyond a 100% extension of the first leg (labeled A of 5, which began in October 2022 and topped in December 2024). A final leg could still target a 100% extension of Subwave A of Wave 5.
What concerns me:
- The recent leg up took significantly less time than the prior A of 5 advance, which lasted more than two years.
- The structure did not produce a classic blow-off spike at the top (though not every major rally ends with one).
Recently bulls failed to start a new rally out of attractive long -i- up, -ii- down trading setups. Every -i- up, -ii- down long setup is an opportunity to start an impulsive rally. But that is also a risk for bulls. If they fail to start a new rally and allow the corrective wave -ii- down to extend under the starting point of a micro wave -i- up that drop invalidates the bullish setup and triggers forced liquidation of long positions. A long -i- up, -ii- down setup triggers in an impulsive decline in case of invalidation.
That opens the door to two bearish alternatives.
Scenario 1: Short-Term Very Bearish, Macro Still Bullish (“Running Flat”)
When a rally begins strongly but repeatedly fails to extend toward its projected target, we are often dealing with a corrective Wave B — an early attempt by bulls to restart impulsive structure following a quick and shallow correction (see the fast April 2025 drop).
Under this scenario:
- ES could marginally break to a new all-time high.
- However, the size of the rally appears smaller than expected.
- The internal microstructure does not resemble a completed five-wave impulsive advance.
If this interpretation is correct, ES could experience a sharp pullback toward the upper boundary of the green box around 6,200 before resuming higher.
ES-mini Daily chart
Scenario 2: Very Bearish Long Term
We cannot completely rule out the possibility that the larger bull market has already topped — without producing a final exhaustion spike.
This remains a lower-probability alternative for now, but it must stay on the radar.
ES-mini Daily chart
Key Macro Level
The first major macro support sits at 6,366 — slightly below the triple top formed in December 2024, January 2025, and February 2025.
That level will be structurally important if downside pressure accelerates.
Bottom line:
Failed attempt to start a new leg up out of a clean -i- up, -ii- down long setup can trigger an accelerated drop driven by forced liquidation of long positions.