Weekend Update: Triangle Completed in the ES...now down? Happy New Year’s Eve to all!
I wanted to get out my weekend update before tonight’s festivities begin. I wish safety and a great time for all reading this post. Let’s jump in.
I'll start with the long-term view. As I am forecasting the first half of 2023 being comprised of prices moving higher. As this pattern matures I'll update it and trades will present themselves. For sake of trading for profit...I want to focus on what's directly in front of us....UPSIDE.
Drilling down you can see from the below chart we’re completing or have completed our e-wave in what I’m counting as a triangle for wave b of B.
On the micro chart below, you’ll see I've annotated the e-wave as being complete or with a slight poke higher being completed. My only concern (not a big concern) about the triangle count is once the a and b-waves are in place the c and e-waves should conclude in the area of .618 of the preceding wave.
As you can see our c-wave breached the .618, but only slightly. It is possible the e-wave may do the same. I mention constantly about being attentive for clues that price gives us. This poke above the .618 could be a clue that this will be a standard a-b-c...or it’s nothing and we decline right out of the gates on the first trading day of the year. However, any trade above 3883 and the purple count will prevail as primary. That pathway is shown above.
Truth is I would like to get a standard a-b-c as because it makes for a better pattern and is easier to forecast. But we don’t get to decide what patterns we can trade...we take what price provides. Bigger picture I am expecting some downside in our larger Black B-wave....after which the long side should be a great trade. I mentioned I will be eyeing some short puts.
DOES ANYONE REMEMBER THE POST I PUT OUT SEVERAL MONTHS AGO...”80% TRADE BY MAY”?
As my longer-term followers are aware, the 3502 bottom back in October was done in a non-discernable wave structure. The spike down and up never revealed a clear wave 4 and 5. Since then I have been dubious of that low. Suffice to say, I was never able to do the 80% trade by May because I waited for what should’ve happened, and that was a wave 4 consolidation and a wave 5 down on positive divergence. However, given where we are now in the price pattern now...this expected move lower should clear things up and pave the way for at least 2-6 months of upside. Here’s the trade I am eyeing.
Provided we get a decline into my expected target area of 3761-3647 I hope to sell as much as 20 ES contracts with a strike of 3600 in tranches. I am choosing the month of April due to its seasonal strength. Since this is a put option it's bullish posture and April is usually a seasonally bullish month.
I will update as we get closer in obtaining my forecasted price targets on the downside. If you’re interested in following, please read the previous posts (links above) as there are qualifying factors to go through to be approved for Futures options in the US. If you are not in a position to participate, it is possible that much of the basket of risk assets will appreciate in value as I am forecasting the US markets to be up as much as 20% in the coming months.
Regardless of what happens in the US Markets in 2023. If you have the ability to trade both sides...we should have a great year as it pertains to trading for profit. 20% moves in a calendar year are to be capitalized on.
Agreed?
Best to all,
Chris
