Long

Updated

ES meets January Elliot Wave Correction

An Elliott Wave combination correction is a complex corrective pattern in Elliott Wave Theory, typically formed when simpler corrective patterns combine to create a larger, more intricate structure. It consists of two or three corrective waves labeled W, X, Y.

Combination corrections aim to extend and complicate the corrective phase, often seen in sideways or consolidative price action. They provide a way for markets to consume time and create balance before resuming the primary trend.

Key Characteristics:

The larger trend of the correction labelled as W,X,Y consists of 3 corrective wave structures being 1 flat, and 2 following zigzag structures.

Each major corrective structure ends with a 3 wave impulse move to the downside, followed by a 2 wave corrective structure before resuming the trend.

You can see more detail on EW theory related to elliot wave combination structures on the website: elliottwave.com/waveopedia/combinations/

What catches my attention for this up coming week is a potential end to the corrective structure on the ES (SP500 Futures), erasing all the markets gains made from Nov 5, 2024 onward. It would be an interesting location to look for potential long trades in the market.

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With big news coming this week, we may have a potential catalyst to move the market as prices move into key demand zones.

The full schedule can be viewed online at: ig.com/uk/economic-calendar?source=dailyfx

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Looking at this on the larger time frame, this last move down could be the final leg of the H&S breakdown here back to the November demand zone from the trump pump

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Also aware of a potential wave 4 being put in after this relief rally today. Either way, we are looking for a total of 5 waves down into the support area

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Looks like we are starting the final wave down here

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This correction is likely done now as per my original EW count, and I will be looking for long trades

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After the clear break of the structure, and putting in the original wave count, we now have a break and change of structure potentially in play. Buy zone would be above the following area.

This would only be bearish to me if we start to lose and close below the buy zone.

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Looking for this impulse to take us to the 1.618 extension here for a wave 5, to then roll over and start a second wave higher.

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Overall all EW count for the final leg

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Approaching the target

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Major Target hit, taking 80% of profits here, and remainder if we hit the 0.618.

I will re-evaluate the next EW count as the market provides more context

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Something I just recently noticed is this potential zone where price may bounce from if we get an ABC correction following the recent rally. This would also form a bullish gartley pattern for a rotation back to the highs.

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Looks like we may have a truncated fifth wave here possibly. Regardless, I will be hedging myself if we see a correction in the coming week.

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The SPY did take the liquidity at the high today, potential island reversal from the previous gap up.

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SFP at the 0.618

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Nice retrace from the 0.618 Fib

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In the instance that we do continue higher, I would also like to be aware of this scenario, where wave 3 hits the common target 1.618 fib, whilst wave 1 and wave 5 are equal in length. We do have an expanding flat proceeding the first wave, and we are potentially moving into a larger wave 3 after the current sideways / expanding flat correction.

This would still be a valid EW count.

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Nasdaq showing similar price action, however there is a clearer ABC correction from friday's price action finding support at the common target 1-1 trend based fib.

If we do see a bounce next week, then I will likely place this count as the more probable scenario

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currently futures opening up with a large gap down, original resistance zone providing resistance as planned for. Lots of important news this week, lets see how the market plans to react before building new positions

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In these scenarios, I prefer to use the anchored VWAP as a basis for where price may find support from the most recent impulse. I was originally expecting the price to retest the 6000 zone, perhaps even wick below slightly before resuming the trend (if it will continue in the higher direction)

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How I will be approaching the market going into CPI

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Daily time frame

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Right into the levels, waiting to see how market will react on the opening bell

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Taking my long trades as planned, and so far we are getting a nice reaction

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Elliot wave theory blows my mind

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Daily close above the key critical support. I will be aware of a potential retest tomorrow

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SPY hit the critical zone on cash New York open. Would like to see a squeeze here

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Be aware of the resistance above us

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Crucial to flip this VWAP into support to progress higher

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So far going according to plan, CPI tomorrow. Lets see if the market has some more juice to squeeze

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potentially curling up here. If this is the low of the second wave, perhaps we will start the next one extending to 1.618 an approx 3% move up.

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Still held down by the supply zone above, bullish as long as we are trading above the vwaps

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Triangle like price action, this current zone would be critical to flip and hold.

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What might have completed a running flat like corrective structure here.

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Nasdaq making more so an expanding flat. Either way, both may have begun the next leg up

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Looking good

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Something like this for the next leg up would be nice

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ES and NQ gapping down overnight proving the current volatility is still there. Nasdaq may be giving us a clue that the correction is not quite over yet, forming a textbook Elliot wave combination structure. Looks like there will be volatility ahead.

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ES holding the critical 6000 zone, for now....

youtube.com/watch?v=ZbSGbwt0pfY&ab_channel=MarzellCrypto

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Looking like the ES may see another WXY correction same as the first

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Waiting on this last drop, if the pivot is in today then I will be aware of the 1-1 extension. Currently we have a potential rejection zone at the 0.618

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Adjusted the 1-1 for the recent top price action

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Once more as the high kept being swept. Looking like the B wave of the larger pattern is forming an expanding flat, typical of a B wave in this overall EW count.

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Correction should now be finished

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Breakout of the triangle

Trade active

Here is the next opportunity to buy the VWAP after the first wave put in

afurs1

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