$ES #ES-mini
Bulls believe they April low was the bottom of a large correction:
ES-mini 240 min chart
The Feb- Mar drop looked corrective indeed. But we did not get the green box tagged.
if the bottom has been made, then we should expect a new impulsive rally. In that case this spiky move up is a micro wave -i- up and it should be followed by a corrective wave -ii- down. A wave -ii- down normally comes as a corrective three wave decline making a higher low.
Here you can see why this rally stopped at 6,815 – 6,818. That level is a confluence of two important resistance levels:
ES-mini 30 min hart
6,814.50 is the broken Yearly Support. If bulls manage to take it back that would close the bear trap of a failed breakdown. In addition, 6,818 is the Monthly Resistance 1.
NQ-mini has a similar picture:
NQ-mini 30 min chart
25,025 is a very important level because its a yearly Support that got broken in March. Its difficult to overestimate significance of retaking that level by bulls. Reclaim of that level and close the week over that level would mean the bears’ attempt to start a down trending move has failed and bears have trapped under 25,000.
Bears need to defend those two resistance levels in ES-mini and NQ-mini to keep alive the bearish scenario.
Alternative bearish scenario: The main risk for bulls is that spiky move up we got this week was a pre-mature attempt to start a new rally. Such a premature rally that quickly runs out of steam without making a new higher his is labelled as a wave (x) up.
In that bearish case we would get a large -a-b-c- move down under 6,000.