ES - it arrived int the Green Target Box with incomplete structure
In update posted on Sunday afternoon I showed my Green Target Box and shared my expectations for an upcoming bullish pullback in a micro wave iv up to be followed by the final micro push lower in wave v down.
However, we got a direct drop into the target box without any pullback. Let’s examine a micro structure of that drop on a micro 15 min chart below.
ES - 240 min updated at 3-00 AM on 8-5-2019
This is another example of danger of fading even a micro wave iii down. It is always safer to wait first for a micro pullback in wave iv and only then attempt to fade the final push lower in a micro wave v down. Despite the fact that this drop has tagged my Green Target box I can not say this is the bottom. The reason I can’t confirm this is the bottom is because we did not get any sizeable pullback in a micro wave iv up. To be considered as wave iv a pullback should retrace at least 23.6% of preceding move in wave iii. We did not any up move at all.
I would rather count that move lower pre-market as an extension of wave c of iii.
At this point it has almost tagged a very common 223.6% ext of wave a of iii down
I do not think it has much space to go lower from here (may be just a nominal new lower low to 2,890) before a pullback in wave iv up startsDespite the fact that this drop has tagged my Green Target box I can not say this is the bottom. The reason I can’t confirm this is the bottom is because we do not get any sizeable pullback in a micro wave iv up.
I count that move lower pre-market as an extension of wave c of iii.
At this point it has almost tagged a very common 223.6% ext of wave a of iii down.
I do not think it has much space to go lower from here (may be just a nominal new lower low to 2,890) before a pullback in wave iv up starts. And only after a bullish pullback in wave iv up we may get another push lower. However, if price manages to get over 2.972 that would be a strong sign that wave v may not come. Because we deal with an impulsive move in wave c inside a corrective wave ( b ) down, this drop may terminate imperfectly without that perfect push in the final micro wave v to a new lower low. In other words, there is a chance that these lows are the bottom of that wave c of ( b ) but this is a low probability scenario simply because of its imperfect incomplete structure. I would personally treat upcoming move up as a temporary pullback in a micro wave iv up.
ES - 15 min updated at 3-00 AM on 8-5-2019
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