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ES mini - has the bearish count got invalidated by this unexpected rally?
I think I know how you feel. It was such a promising drop this morning and then bears failed again and we ended up closing higher… Now you question yourself what to do with your shorts. Let’s start from a bigger picture. We come back down to the same 4 hour chart and see that nothing really happened. The price is approaching 250% extension of the wave ( i ) up at 2,963.75 and getting deeper into the Red Target box.There are two potential explanation of that rally. The first one is that it is a corrective wave. Yes, sometimes with an Expanded Flat Structure a corrective wave may make a higher high. Look at the red square highligting a similar case which happened in mid March. Wave ( a ) up has topped and then wave ( x ) managed to make a higher high before price collapsed in wave ( y ) down. Now lets zoom-in to 15 min chart to see a micro count of the very last wave c up.
ES mini - 15 min chart updated at 10:00 PM on 4/30/2019
We have been counting a micro Five Wave up fractal off the low made on 18 Apr 2019. As you remember, I counted full five waves completed at the high made last Friday. And here again you see another case when a corrective wave managed to make so called orthodox higher high over the top of preceding impulsive wave (look at the red square and wave b of b. However, because this move looks a bit stronger that that case I have to offer you an alternative micro count where this rally is counted as a micro wave v up. Again, I see a strong confluence of fibs at 2,964… In conclusion, I do not see any drama in what has happened. The bearish count that implies a completion of the rally off December 2018 lows is very well alive.