This report below was posted for my subscribers at 6:15 PM on Sunday. At that time ES traded at 2,864. I reaffirmed my bearish outlook and wrote: “That current decline in wave ( a ) most likely targets a new lower low in 2,820-2,800 neighborhood.”
ES - topped in wave XX and started decline in the final a-b-c down
After Friday close I posted a long post explaining that the market had to decline again in another (a)-(b)-(c) move down. On Sunday evening ES-mini opened with a gap down. Most likely that is a start of the first subwave ( a ) down from that expected final (a)-(b)-(c) down structure. That current decline in wave ( a ) most likely targets a new lower low in 2,820-2,800 neighborhood. Once that wave ( a ) finds its bottom we should get another pullback up in subwave ( b ) up followed by another decline targeting a new lower low in wave ( c ) down.
That whipsaw inside a downward slope channel is a textbook “Triple Three” pattern. As you can see on the chart below, that pattern is comprised of three a-b-c structured connected by two wave sin direction of the main trend labelled as X and XX. The ultimate goal of that structure is to change bullish sentiment of the crowd. That final a-b-c down may not make significantly lower lows. It may reach only nominally new lows. It’s goal not to scare bulls with a heartbreaking decline but rather keep burning time making bulls to lose hope in continuation of the trend up. And another goal is to bring back conviction to bears. They need to believe the rally finally stopped and we have seen a major bearish reversal. The market waits for bears to increase shorts because those shorts will become fuel of another rally in wave ( C ) of ( 5 ) targeting new higher highs.
If you are subscribed to my video course “Predict the Market with Harmonic Elliott Wave theory” I strongly recommend you to watch two new video lessons I posted today. Watch Lesson 72 “New! Unfolding Corrective Wave: Triple Three structure” and Lesson 78 “Case Study: ES-mini, unfolding correction”.