CastAway Trader
CastAway Trader Predict the Next Market Move

ES - potential path off the low

I always want to have a conservative point of view. The optimistic point of view would be to say that the whole wave ( 4 ) down has bottomed and we should expect an impulsive rally in wave ( A ) of ( 5 ) up. Even though that is possible I always base my trading on less optimistic scenario. To be safe I assume it was only subwave ( A ) of wave ( 4 ) down. Then I can not expect an impulsive rally off the low! I should expect some A-B-C up structure. And wave A would be subdivided as a-b-c. That gives me a very important framework to apply to the current actual structure.

ES - 60 min chart update at 9-40 PM on 3-18-2020

If I apply that fractal to the actual chart I may get this path off the low made on Wednesday (see below). We always look for a reversal structure Inverse Head and Shoulders. If we are lucky we can get that wave b down making the right shoulder ( a higher low ). I added retracement levels applied to the whole move down off Feb 2020 top. Normally the first bounce targets 23.6% retracement of the completed structure. In this case that is 2,530. The main resistance is 50% retracement at 2,826. This is where the second leg up in wave C up may ultimately stretch.

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