ES Morning Update August 15th 2018

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Looks like yesterdays move was indeed just a B wave up that subdivided into a smaller ABC pattern. That suggests that the current drop in the futures right now is the start of a C wave down. It's coming upon horizontal support right now so it could bounce some soon, or just wait until the open. But if this truly is a C wave down the bounce might be small as many bulls are trapped right now I'd bet. And C waves almost always breakdown into smaller waves... usually 5 smaller waves, but if powerful enough those waves can subdivide too. I don't expect that to be the case today but I'd be shocked if the horizontal support area around 2820 isn't broken today.

Today should be an "all down day", meaning it opens down and closes down even lower with tiny bounces throughout the day. It should be an exciting day for the bears, and if you are short you should have a smile on your face this morning. Obvious support lower is the 2790 prior low and the 2800 even number level. After that it around July 10th and 11th lows, which is in the 2775 zone. I don't see it going down that low today as first it has to break the current horizontal support in the 2820's area. Possibly today we just see the bulls struggle all day long to keep from losing that zone... which would be a long drawn out wave 2 up in a C down.

Resistance on the way back up would be the falling green trendline that's pointing to about 2835 or so into the close. It's higher early in the day of course and will continue to fall even lower into tomorrow where it will still be resistance for the bulls. Today should be an interesting day for sure as the bulls are finally caught with their backs against the wall... or I should say "backs against the edge of a cliff". If they don't hold this 2820 area and get through the falling green trendline with a close over it, then tomorrow they should bring their parachutes as they are going to need them.