CastAway Trader
CastAway Trader Predict the Next Market Move

ES - perfect completion of the second leg down

My method of forecasting relies upon theory that market keeps repeating a number of specific patterns. This is a standard corrective (A)-(B)-(C) down fractal. The first leg down in wave ( A ) may have A-B-C structure. But the second leg down in wave ( C ) should be subdivided into five micro waves.

I highlighted with the yellow box the five wave down fractal ES has just perfectly completed. If you have been practicing the Harmonic Elliott Wave theory long enough you could ask me why wave ( i ) down does not have a-b-c subdivision. And I do not have a great answer to that question. Remember, we deal with a theoretical fractal that provides us with general guidance. I noted many times in my trading career but being a purist hurts trading results.

What you should learn from this case is that:

– you have to insist on the structure to complete. I have been mumbling “one more low” and “I need one more low before I can call the bottom of the corrective move down”. And we have got that one more move down on Wednesday!

– look at 76.4% ext for subwave ( c ) of wave ( v ). Again, that is an absolute minimum extension for subwave ( c ) of ( v ).

Not very often you will see that minimum extension. That happens when the market is super overextended. You literally see how difficult for bears to squeeze that one more lower low. You hear so many bullish calls but bears like wicked keep pushing it lower. That is a great example showing efficiency of fractal forecasting.

ES - 60 min chart updated at 7-57-PM on 3-18-2020

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