Saturday, April 20, 2024

ES Morning Update October 14th 2016


Yesterday into the close we saw our B wave down happen that I had been talking about all day in the chatroom.  You had to be right on top of it and not leave early before the close to have caught it as it didn't start until the last half an hour or so.  That move down allowed a C wave to start this morning.

Ok, so the A wave up went from the 2107 low to the late day high of 2132 yesterday.  The B wave down went from that 2132 high to 2122 afterhours and we are now in the C up.  If this C up equals the A up then it should about 25 points up from the 2122 low on the B wave.  That's about 2147 or so... but that doesn't mean it will happen all today, as it could happen afterhours.

Now, that's if C equals A, which I find is more likely on counter trend rallies in a down move... whereas the C waves up are more commonly 1.618 times the A wave when the market is in an uptrend.  From what I see the bigger picture tells me that we have been in a down trend since the 9/9 high.

Look back on 9/15 for an example... you'll see a 2107 low that rallied to 2144 for the A wave up, then sideways chop until 9/21 for the B wave and then some C wave up started.  It basically started at 2136 that day and ran hard to 2172 on 9/22, which was a 36 point move up where the A wave up was 37 points... or about the same.  In 2013 and 2014 we were still strong in the Bull market but since about 2015 after the "Lucy" mini-crash this market has been in a sideways 200+ trading range for 1-2 years now... and it's a bear market.

So, while it's completely possible that we have some C wave that is more then 100% of A (like 1.618% of A) it's not likely.  Odds favor C being equal to A... give or take a few points.  That implies about 2147 for this C wave high.  I'll stick with that area as I just don't see 1.618 times A as that's about 60 points up or 2182... and that's too high in my opinion for this C wave up.  However, that doesn't mean we don't continue up next week.  It only implies this C wave up will end in that area and we'll pullback for another ABC pattern before making another move higher.

Author: Red

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