ES - this is why it is too early to go short
I want you to understand well a bigger picture. The rally that started in December 2018 has an impulsive structure and is subdivided into five waves.
On June 4 Es bottomed in a corrective wave ( iv ) down (see the blue ( iv ) in the lower left corner of the chart below ).
Off that low we should get the final wave ( v ) up that has to be structured as subwave ( a ) up followed by a subwave ( b ) down and get its final conclusion in subwave ( c ) up (see the blue “( c ) of ( v )” label in the upper right corner of the chart below.
You can see that the blue wave ( a ) of ( v ) topped at 3,023 on July 15. Then Es played a corrective wave ( b ) down that was finalized with a sharp drop on August 5. See the red labelled a-b-c structure pointing down. Finally, we are left with the final wave ( c ) of ( v ). What do we know about wave ( c ) of ( v )? First, it has to make a new all time high over the top of wave ( a ) of ( v ). Its a must and there could be no exceptions to that rule. Second, that wave ( c ) of ( v ) has to have an impulsive structure and has to be subdivided into five waves. Third, preliminary targets for that blue wave ( c ) of ( v ) are 3,092 – 3,134. Those are minimum extensions and sometimes wave ( c ) of ( v ) gets very strong if too many bears are caught with large opened short positions. Now let’s talk about micro counting micro five waves inside that wave ( c ) of ( v ) up. Off the low of wave ( b ) of ( v ) down made on August 5 we have a clean a-b-c up of wave i up. Then we got a clean a-b-c down structure that we should count as a corrective wave ii down. The rally that started at the low made by a corrective wave ii down at 2,817.75 on August 15 is the first leg up of wave iii up. I expect it to stretch at least to 2,980.50. It may extend to 3,019. In any case that is only the first leg up in wave iii. We really can not predict how deep wave b of ii may come. I noted that wave b of iii may be as deep as preceding corrective wave ii down. The preceding corrective wave ii down was very deep retracing almost 76.4% of the rally in ave i up…
If we zoom-in again to inspect a micro micro structure of wave a of iii of ( c ) of ( v ) on 15 min chart below we can see that it also follows the Five Wave up fractal. And it has not completed the micro wave iii up. That micro micro structure confirms my expectation for five micro waves of the wave a of iii of ( a ) of ( v ) to top in between of 2,980 and 3,020.
ES - 15 min chart updated at 2-00 AM on 8-20-2019
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