ES

The bounce got under way as expected, although, from lower levels than anticipated. It appeared that the structure down was complete entering globex last night. Unfortunately, there was another leg down.

We actually pierced the H/S neckline and traded below it before SPX found support at its 200 sma and the bounce started. It took a couple try's before we managed to retake the neckline. It appears that we have started a corrective ABC off the 882 lows and it does not appear impulsive.

I have serious problems with the flat I have labeled (cyan). The C leg looks just too big to be a part of a flat, having gone to about the 261.8% projection. There also seems to be too many waves (thats why I thought we had a completed structure last night). I'm guessing that it is probably a zigzag, which means that more than likely we have a complete structure from 884.25 to 928.25. I have changed this probable zz to an A.

I have also changed my labeling in red to reflect this (in order of preference). I still have the 2 on the chart, but I am fairly convinced that will not play out (yet). I do not believe we have finished our bear rally. My best guess (and thats what it is) is that we will trace out a triple zigzag.

Bottom line is that we should see continued strength in the market until the B up is finished. Targets would be the 38.2% @ 899.75 up to the 61.8% @ 910.50. Regardless of what price B ends at, C down will follow.


Here is an update to my globex trades. I was long @ 90.25 (88.6%) thinking we had a completed structure down. Wrong. Took a stop under the low @ 88.50 for a small loser.

However, I put a buy order in before I went to bed @ 883.50. This was the 161.8% and where a Bullish Crab would turn if the pattern played out. It did and I took 1 off at 887.75 and the other @ 890.25.