#ES #macro #weekend update #trading setup
I count the move up off the October low as subwave C of wave (B) up:
That move up will complete a corrective A up, B down, C up consolidation off the major low made by the first A-B-C move down that bottomed in June 2022 (labelled (A) down).
Let’s zoom in to see a micro structure of the move up off the October low:
We can see that the move up has been shaped as a bearish ascending wedge.
Last week ES hit 100% ext of subwave (a) up and got rejected =4,099.60.
In addition, the second resistance is formed by 66.7%retracement fib (the arrow on the roght part of teh screen) = 4,062.69.
If you look at the first chart above, you can see a stable repeating cycle that connected the Jan’22 top – the Mar’22 top – Jun’22 low – Sep’22 top. That cycle points to Dec 6th as the next important turning point.
Let’s dive in deeper down to micro count on 30 min:
We can see a perfectly completed (a) up, (b) down, (c) up structure off the rally that started in October 2022.
Normally, the second leg up in subwave (c) up has a clean five wave impulsive structure. In this case we can easily count all five micro waves up inside subwave (c).
We all love certainty. Our brain can hardly tolerate uncertainty. You would be happy if I told you that is a perfect short setup because the micro structure of the corrective bounce looks having completed. And that is true. The micro structure looks 100% completed. But ES is the most challenging instrument o trade because it loves to make unnecessary higher highs to spook bears and make them doubt their conviction.
In this case I can see how bulls could make one more push higher.
Let’s look at the most bullish scenario and the most painful for bears on a 30 min chart below:
What bears need to invalidate that painful potential is to break under 3,940. Until that happens, bulls can push higher:
Let’s get back to the primary bearish “the top is in” scenario we discussed above:
The problem with the bearish count is that strong bounce on Friday.
The morning low could have been counted as subwave c of wave i down.
But in that case subwave a of wave ii up had to stop at 41.4% -50% retracement fib of wave i down = 4,059. That strong bounce can hardly be counted as subwave a of wave ii up.
On a micro level, the bullish count looks more reasonable…