Weekend Update ES

SPX We are very close to completing (A)...if I'm interpreting structure correctly. My guess is that we should conclude this wave by Monday or Tuesday at the latest.

Once complete, look for an ensuing (B) to the downside to kick-off. (B) will take the form of a zigzag, triangle or flat. A nice sharp zigzag would be my preference, as I plan on putting on a put position.

My guess though is a flat, possibly expanded. This would suck in new longs while shaking out the amateur shorts.

ES It appears as though we finished off the wave 4 corrective on Friday and have started 5 in earnest.

We clearly have 5 waves up off the 962.50 L, which is labeled in cyan. It looks like a bunch of 1's and 2's. This of course means that 3 of 5 is extending (if correct).

We know that the second set of 5's can not be 3 because it would be the shortest wave. That would break an EWT cardinal rule. I'm sufficiently satisfied that 3 is extending.

Targets? It appears that the minimum 1 - 3 projection will be easily surpassed. The 78.6% comes in at 984.50, but it doesn't appear as though that target will be high enough. I will be watching the 990 area (100% of 1 - 3) and the 995 level, which I discuss below.

Here is the 2.50 point range chart with my channel. Don't be surprised if the mid-line comes in play again.

Also notice the inflection point around 995 where the mid-line and the 1 - 3 line meet. This could be an important level.

RSI more than likely will be divergent at the completion of this 5th. That shouldn't come as a surprise, as that's what happens with 5th's.

This is a 60m chart with a Gann Fan from the March lows. Notice the inflection point where the trendline across the highs and fan line meet.

The 995 price level is a 685% Fibonacci projection from wave 1. In my work, I have found that when wave 3 extends past the 423.% projection, odds favor price reaching this level. This is also a 50% projection of waves 1 - 3.

By no means a certainty or guarantee folks. If structure allows price to get that high, I will be looking for price to turn there.