ES Morning Update September 11th 2020


If all goes well yesterdays higher low should hold and be the bottom of the tiny wave 2 down. Today we should rally back up toward 3400 for the start of the tiny wave 3 up. This is counter trend rally of course as the market is still in a pullback corrective mode from the 3587 (ES) all time high. That's probably why the wave 2's, 4's and B's down are stronger then the wave 1's, 3's, 5's, A's and C's up.

So this tiny wave 3 up might struggle and grind higher versus the face rippers we have commonly seen in the past. I don't know if it ends today or extends into Monday but afterwards there should be a tiny 4 down and tiny 5 up to complete the small wave A up.

Again, I'm guessing on the wave count as I'm not an expert in it. I just know the common pattern of how SkyNet loves to trick the bears that miss the A wave down and are waiting for the B wave rally so they can short the C wave down. This in my humble opinion is why the B wave rallies will extend and extend in time, and subdivide into smaller waves. It's all to trick the most traders.

A rally up to maybe the 3500 area on Monday (or into Tuesday morning) would certainly lure in some bears to short it, but if my thinking is correct that entire series of waves up from the 9/8 low will only be the small A wave up inside the medium B up. A drop of maybe a 100 points on Tuesday would just be the small B down inside the medium B up.

That's where a lot of bears will get trapped thinking it's the start of the medium C down. This would of course be where the small C up starts to top out the medium B wave late that week or early the following week. By then though the market could get a lot closer to the current all time high, like in the 3550-3575 area.

This should be the real top of the medium B wave bounce, and I'm guessing it will happen on the 21st or 22nd. Again, just a "best guess" and not some guarantee. If it happens then the medium C wave down should follow and take us into the 3200's by the end of the month. As for today I'm looking for this tiny wave 3 up to start at some point and carry into early Monday. Have a great weekend.


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