ES - another rate cut may push ES higher
On Friday ES did not make it to the Red Target box.
This afternoon FED made another surprise move and cut the interest rate to zero and announced $700 bln QE program.
Those news may support the market and even push it higher helping ES to extend the rally and tag the Red Target box.
However, after completion of that a-b-c move up off the low made pre-market last Friday we should expect a move down.
If we get a corrective looking a-b-c move down making a higher low that will be an attractive long setup.
If, in contrast, we will get an impulsive looking decline pushing prices back down to the lows seen before the open on Friday, that would be a bearish sign.
ES - 4,500 tick bar chart at 5-40 PM on 3-15-2020
Today I posted a new video explaining two main alternative scenarios.
Both scenarios suggest that the first move up off the low will be followed by a pullback.
The bullish scenario suggest that we get a corrective looking move down structured as a-b-c. If that move down makes a higher low that would be an attractive long setup for another rally in wave -c- up.
Bullish Scenario
The bearish scenario shown below considers that a-b-c up move off the Friday’s low as a corrective wave iv up. Under that scenario after completion of the Friday afternoon rally in subwave c of wave iv up we should get an impulsive looking decline in subwave a of wave v down. That strong decline would retest the Friday’s lows.
In conclusion, after ES completes the rally started on Friday afternoon both scenarios expect a deep pullback. The rally may stop at the Red Target box or stretch a bit higher.
If bulls manage to violate resistance at 2,873.50 that would invalidate the bearish alternative count.
Alternative Bearish Scenario
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