CastAway Trader
CastAway Trader Predict the Next Market Move

ES - Macro-to-Micro Weekend Update

Most likely the rally off the mid March 2020 lows is subwave ( A ) of wave ( 5 ) up.

That count suggests that the next bearish pullback will not be able to get down to March lows.

Normally subwave ( B ) down of wave ( 5 ) up manages to retrace from 41.4% to 66.7% of the preceding big rally ( 2,992 – 2,629).

The main macro question is whether subwave ( A ) of wave ( 5 ) up has topped or may push higher.
I assume it has topped already.

ES - Daily chart updated at 6-09 PM on 10-18-2020

If we assume that subwave (A) of wave ( 5 ) topped at 3,576 on Sep 2nd That rally in subwave ( A ) of wave ( 5 ) up topped at 3,576.75 on Sep 2nd, 2020 then we should expect a large corrective -A-B-C- down structure off the early Sep top.
We can count the decline that bottomed at 3,198 on Sep 24 th as subwave -A- down.

The rally that followed has a clean (a)-(b)-(c) up structure. It should be subwave -B- up.

ES - 240 min chart updated at 6-09 PM on 10-18-2020

To complete a large subwave -B- up ES has to complete its subwave ( c ) of -B- up.

And, as you can see on the chart above, ES recently bottomed in a micro wave -iv- down (at 3,431.50 on 10-15-2020).

As long as bulls hold over that level the count suggests continuation of the rally in wave -v- up that would complete the whole large wave -B- up.

That wave -B- up may retest the previous top made on Sep 2nd at 3,576 or can eve make a slightly higher higher at 3,600+.

Such a fake momentarily breakout would set a stage for a large impulsive decline in wave -C down targeting area under 3,000.

ES - 60 min chart updated at 6-09 PM on 10-18-2020

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