Weekend Update - ES

ES
I spent an inordinate amount of time this holiday weekend trying to get a handle on where the heck we are in the equity markets (in between a lot of football and beer of course :)

In my opinion, there are three different scenarios at play here:

1.) minor C has completed at the 1038.75 H. This finished intermediate (Y) of a double zigzag, which completes primary [2]. This would conclude the bear counter trend rally from the March lows. The "Great Bear" has returned.

2.) minor C has yet to complete.

a.) the 1038.75 H finished minute [i] of [v] of C.
b.) the 1038.75 H only finished minor A and we are tracing B currently.

The "Great Bear" has to wait a little longer before he returns.

You can make good arguments for each one of these scenarios. Each of the scenarios also have issues - some major.

My preferred at this point in time is that we finished minor A at the 1038.75 H. It is also likely the most bullish scenario.

This means that the 991 L completed minute [a] of B. We are currently tracing a double zigzag for [b], in what will either be a triangle or flat.

It is also possible that the 1038.75 H completed minute [i] and the 991 L finished [ii].

This means that we would be entering the meat of [iii] very soon, as it appears that we will finish minuette (i) in short order.

After a brief (ii) retrace, we hit (iii) of [iii]. This is the second most bullish scenario, though the least likely to be correct imo.

This is the bearish scenario. The 1038.75 H completed the bear rally.

The problem that I have with this view is that only Houdini and EWI can get a 5 down to the 991 L. Is it possible? Sure. It's very possible.

Structure, as many of you are aware, can be extremely difficult to discern at times. As mentioned in a post this past week, perhaps structure is trying to fool the masses.

I believe it counts best (actually very well) as a 3, therefore, this is my second alternate.

Here is my assessment of the intraday structure. Notice that we are very close to the upper boundary of the base channel.

This leg appears to be nearly complete, at which point, we should see downside pressure - regardless of the bigger count.

Bottom line - there is clearly uncertainty in the bigger picture with regard to structure and form. What is not uncertain is the deteriorating internals and technicals.

Two of the three above scenarios call for lower near-term price. That is my view as well. I'm anxious to see how price interacts at the March low channel line.

If we breach the 1038.75 H, then we will know that C is incomplete. If price takes the 975.50 L, scenario 2a is off the table.