$ES: Be Prepared for FOMC-Driven “Pump-and-Dump” Setup?

#FOMC #ES #corrective (a)-(b)-(c)

The ES-mini bounced off the early April low in a three-wave corrective structure.

So far, wave (c) — the second leg up — has been unusually short, reaching only the 76.4% extension of wave (a), with the full 100% extension target at 5,832.50.

This raises a red flag: in a typical corrective move, wave (c) usually exceeds wave (a) in length.

ES-mini 120 min chart

🔹 Current Price Context:

ES remains stuck within its Monthly Opening Range:
Support: 5,601
Resistance: 5,724.75

Month Opening Range, ES-mini

Bears failed twice to break the 5,601 support — a sign of weakness in bearish momentum.

The next short-term resistance is the top of the Monthly Range at 5,724.75. A break above this level could ignite an extension of wave (c) up to the full target at 5,832.50.

🔹 Micro-Level Support to Watch:

Key intraday level for Wednesday: Daily support at 5,655
- A break back above 5,655 would signal a bullish failed breakdown setup, possibly catching bears offside and fueling a squeeze higher.

📌 Key Catalyst Today: FOMC at 2:00 PM EST

With the FOMC rate announcement looming this afternoon, the market is vulnerable to a “pump-and-dump” scenario:
- A spike higher on the headline (possibly toward 5,724.75 or 5,832.50),
- Followed by a sharp reversal if the rally proves to be FOMO-driven and unsustainable.

✅ Conclusion:

The current wave structure remains corrective, not impulsive — and wave (c) up has underperformed so far.
Bears missed their chance to confirm the bearish reversal yesterday, failing twice to break the key 5,601 level.
If bulls reclaim 5,655, they may trigger a bullish breakout toward 5,724.75.
If bulls manage to break the Monthly Resistance 5,724.75 they would turn the monthly trend up and open the door for extension with the target 1 at 5,832.50.
However, this move could be a bulls’ trap if it unfolds into a FOMC-fueled spike, followed by a sharp reversal back under 5,724.75

⚠️ Trading Bias:
Cautiously bullish into FOMC with tight risk control. Watch for a reversal signal after the 2:00 PM announcement to fade any overextended rally.

Break under 5,601 would confirm completion of a corrective (a)-(b)-(c) up bounce and potentially start of a new large leg down.

More To Explore

$ES: Bears Have A Clean Setup

$ES #ELLIOTT WAVE #trading setup #short setup Bulls squeezed a slighly higher high on Thursday. But ES closed back under

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$ES: Bears Failed to Break the Monthly Support

$ES #Month Opening Range Yesterday, I anticipated a classic “pump-and-dump” scenario following the FOMC announcement. However, that move didn’t materialize.

CastAwayTrader May 8, 2025

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