Weekend Update - ES, DOW, RUT, Nasdaq

ES
The overall pattern for the ES, and all the equity markets for that matter, remain difficult to discern.

It's just one of those situations where we won't truly know what structure has traced until after the fact, which is not uncommon.

It makes it hard for position traders, and to some extent, swing traders. If your a scalper like me, you should be doing just fine because all we really care about is where the next 3-6 handles is headed.

The 15 minute pit session chart shows an island reversal. This is basically an exhaustion gap that is followed by a breakaway gap in the opposite direction.

I am counting the move off the 1112.25 H as a 5 wave structure. You could argue for a 3, but I think it counts best as a 5.

This implies that after a retrace process we should see an additional 5 waves down, at minimum.


It appears that we have 5 small waves up from the 1085.25 L, which I have labeled as a sub-minuette degree a or i.

Drilling down further, we can see that it appears that micro [A] is complete. We should get a small [B] retracement (levels on chart) when globex opens, followed by a [C] leg lower.

At that point, I would expect to see a 5 wave structure higher of sub-minuette degree. If your a scalper, it should make for a nice little trade, as a measures 7.5 handles.


Any trade through the 1085.25 L would invalidate this view.

The weekly view suggests that we should see additional downside pressure on price.

This past week saw price action fill the long standing gap from October 08.

More noteworthy, in my opinion, is that we had a KoolsTools cycle peak come due. This suggests that we may see lower price, though never a certainty.

This basically jives with what short-term structure is suggesting as well.