Look first at the top labelled as blue ( a ).
This is a kind of a top we have got on 1 May 2019
Then we have got wave w down (black label). I think that decline is comparable to decline in ES from 1 May 2019 top into the bottom on 3 June 2019.
Now comes the most interesting part! Look at that vertical looking rally in wave b up. Doesn’t it look similar to what we are having here in ES now?
Not only it looks super strong but it managed to make a new higher high over preceding top made by impulsive wave ( a ) of ( v ) up.
It made a slightly higher high and run all stops of bears only to immediately reverse and drop to a lower low in the final wave y of ( b ).
That second leg down in wave y = 176.4% of w down.
In our case that means wave C of ( B ) down (look at the first chart above ) may stretch to 2,550 after this crazy rally in wave B up of ( B ) down tops.
Now lets zoom-in to 4 hour chart:
Looking at 4 hour chart we see that ES opened with a gap up inside the Red Supply Zone. In general such gaps on Monday are not sustainable. If it holds until the open I will be a buyer of puts.
Now you should ask me how to align that wave B up on daily with that ( a ) up on 4 hour chart.
It’s very simple!
Wave B up on daily can not cover all that distance to the 1 May 2019 top in a straight line fashion.
It should be structured as (a) up – ( b ) down – ( c ) up.
I think the rally we have been watching the low on 3 June 2019 was wave ( a ) up of that Large B up on a Daily chart. And we should get a pullback in wave ( b ) down.