ES

The equity markets had a strong rebound day. ES Range was 26.75 handles, while volume contracted. Noticeably lagging was the Naz.

There are a few ways to look at structure, this is one view. There is no reason to bring up the other options I'm looking at until needed (which may be soon).

I have labeled the 1038 L (pit session) as minuette wave (iii), as this makes the most sense at this time. This leaves us tracing (iv) currently.

It appears to me that we have a zigzag type move off the 1038 L. I believe it counts best as a double zigzag, but you could argue for just a single. I DO NOT think it supports an impulse very well, though it's certainly possible.

Where will I know this view is incorrect? Any trade through the 1070.25 level, as this is the price extreme of (i).

Notice that price was stopped precisely at the channel line. This channel is just a guide until the wave (iv) price extreme is in place. At that point, we would connect (ii) and (iv).

One of the issues I have with this interpretation is the lack of alternation in (ii) and (iv) thus far. Remember, that's just a guideline and not a rule, however, I always like to see it.

Perhaps (ii) is in the wrong place. Maybe it finished at the 1088.50 H? This would take care of the alternation concern and leave us with a beautiful in-tact channel.

We will need additional price action to fully understand what's going on. At this point, we are trying to make educated guesses. Sometimes structure gives you enough hints and clues that allow you to have a fairly good idea, while other times your left wondering what exactly the hell is going on.

I'm somewhat satisfied with my view so far. I would like to see price action hold the channel, though not necessary, and trade to the downside tomorrow. It would be nice to take the big gap back, however, a truncated wave (v) would be fine.