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

Trading is risky. Read this important Disclaimer


Trading stocks, options, or futures carries a high level of risk, and may not be suitable for all investors. Before deciding to trade, you should carefully consider your objectives, financial situation, needs and level of experience. CastAway Trader LLC provides general overview of trading methods that does not take into account your objectives, financial situation or needs. The content of this website must not be construed as personal advice. The possibility exists that you could sustain a loss in excess of your deposited funds and therefore, you should not speculate with capital that you cannot afford to lose. You should be aware of all the risks associated with trading. You should seek advice from an independent financial advisor. Past performance is not necessarily indicative of future success.

Previous Updates:

No posts found.