EW analysis ES - A little more upside then a potential wave 2
Updated
Earlier today I did a little educational piece on the CoT-data where I showcased a chart of the S&P 200 E-Mini. I explained, that the buying action of the commercials in september of 2022 probably indicate, that it is a larger bottom, that will possibly hold for years to come.
So I look to the upside in ES although the short term patterns are quite difficult to count and not look that beautiful. To achieve a viable bullish count I had to work with some irregular corrections.
To put it in a nutshell.
The most probable scenario is, that we are currently seeing a big bottom that is beeing build by a double 1 - 2 wave pattern. The most recent price action is best described as a wave 4 of that second wave 1. So I would expect wave 5 to develop next week with limited upside potential. Wave 5 will probably end around 4.250 to 4.260.
After that wave 2 will correct the upmove that started january 6. Possible targets are approximately 4.030 to 3.980 depending on the price span wave 5 will travel.
Considering seasonality and time cycles I would expect the larger wave 2 to make bottom around march 17.
So I look to the upside in ES although the short term patterns are quite difficult to count and not look that beautiful. To achieve a viable bullish count I had to work with some irregular corrections.
To put it in a nutshell.
The most probable scenario is, that we are currently seeing a big bottom that is beeing build by a double 1 - 2 wave pattern. The most recent price action is best described as a wave 4 of that second wave 1. So I would expect wave 5 to develop next week with limited upside potential. Wave 5 will probably end around 4.250 to 4.260.
After that wave 2 will correct the upmove that started january 6. Possible targets are approximately 4.030 to 3.980 depending on the price span wave 5 will travel.
Considering seasonality and time cycles I would expect the larger wave 2 to make bottom around march 17.
Note
Well unfortunately this last count was clearly wrong. I still favor the upside. So it is time to think of different options.
One option is a running wave 2 of larger degree, which already ratraced 68 % of that wave 1 movement.
Wave c of that running 2 might have finished. But today's low could also be the end of wave 3 and 5 would follow next week.
At the bottom we saw something that ressembles an ending diagonal, although this count is very dubious. But it really triggered a great reversal. So in the bigger picture this ending diagonal could be the end of wave c of 2 and we now see the beginning of the big wave 3 upward.
Alternatively it is the end of wave 3 (unlikely if it really is an ending diagonal) and we see wave 4. If it retraces more than 3.955 its more likely to be wave 4.
If on the other hand we go above 4.036 it is more probably wave 1 of larger wave 3.
Note
Analysing the futures market can be difficult sometimes because the low volume overnight sessions produce a lot of random noise.So today I analysed the ES on another platform that allows the construction of volume weighted charts. The picture ist more clear now.
Yesterday's trough was actually the end of the third wave and the ensuing rally has corrective character and marks wave 4.
I fully expect further declines in monday's trading. But fortunately my cycle analysis, which I also do on another platform, suggests that we might see a bottom in monday trading around noon (ET).
Below the Links to the charts I created on the other platform.
First the volume weighted chart:
images2.imgbox.com/24/f2/r2RtRyEA_o.png?download=true
Then the "normal" chart with the cycle analysis (marked with diamonds respectively ledgers for future points). I marked 12 ET with a vertical line:
images2.imgbox.com/53/8e/krdOL8By_o.png?download=true
Note
Looks like ES hit the bottom today.Next major resistance is the 200 MA on the hourly chart and the 38 % retracement of the entire move at 4034.
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