ES Morning Update May 10th 2021


Last Friday I discussed a possible wave count that started at the 4120 low from 5/4, which basically started a 5 wave move up and I'm labeling them each as medium waves. The first medium wave ended around 4177 or 4179 the next day, not sure which? But from there a medium wave 2 took us into the 5/6 low around 4140, and then the medium wave 3 up started. It might have ended at the 4238 high Friday afterhours, I'm not positive.

If it did then today we should see the medium wave 4 pullback, which should be small... meaning the 4200 level should hold. Then tomorrow we start the medium wave 5 up, which should reach 4260-4290 before it's complete. Once that happens the 5 medium waves will all be finished and allow some larger degree pullback to happen.

It's at this point that I have to speculate on all the larger degree waves as I don't know if we get as small pullback or a large one. But on the small and normal pattern we should pullback 50% I think, and if we tag 4290 on the upside then we have 170 points up from the 4120 low, and half of that is 85... so a pullback to 4205 or so would be expected. Basically I would be labeling the 5 medium waves up as one large wave and the coming pullback as a large wave 2 down.

This is my preferred scenario, but a second scenario would be to take out the 4120 prior low by a few points, like a tag of 4100 even or a slight pierce of it. In this case I'd look to the bigger picture for clues. Since I think we are going much higher, like 4400, 4500, and even 4700 before we finally top out, I think we've only done 3 out of 5 extra large waves up from the March 2020 low.

I think the extra large wave 1 ended at the 9/2/2020 high, then extra large wave 2 down bottomed around 9/23/2020. From there we started the extra large wave 3 up, but I don't know if it's ended or not? When I look for some extra large wave 4 pullback in the charts there's no recent period where any move down is even close to the September 2020 drop. I know that wave 2's and wave 4's alternate in pattern and depth usually.

Since the September 2020 drop was an ABC pattern and was 389 points (3587-3198), it's reasonable to think that the extra large wave 4 pullback could do a one wave move down and be only half of the points of extra large wave 2... or just under 200 points simply put.

This is where the door is still open for a move to 4100 (or lower) from a 4290 high, and this second scenario would then setup the final extra large wave 5 up to start. The bottom line here is that a pullback of some degree is coming after a final push up into the 4260-4290 area this week. No matter how you sub-divide the smaller waves there will be 5 completed waves up from the 4120 low when we reach major resistance in that 4260-4290 zone.

I suspect that we'll hit it tomorrow but that's just a best guess. If so, then I think it's a short down to the 4205 area if just a 50% pullback of the 5 wave move up, or down to 4050-4100 if it's the start of extra large wave 4 down. No matter which one plays out extra large wave 5 up is still left and should take us up to insane levels before we crash 60-70% afterwards. Have a blessed day.

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