The Market Pulse

The ES_F opened with a furry but the gap was quickly closed, then the market spend the remainder of the session in range bound trading.There are essentially two scenarios: a fourth wave triangle or an ending diagonal. Regardless of which interpretation prevails, tomorrows session will quickly expose which pattern is correct.

The ending diagonal implies that the top completed at today's open. While I don't have the structure labeled, the decline from 1335.75 could be counted as a five wave decline, followed by a three wave countertrend move.



A challenge of w.iv circle (1324.25) within 50% of the time the pattern took to form would bolster this view. W.v circle took 46 bars. The 50% time relationship implies that the w.v circle will be retraced within 69 bars(start to finish). 50% of 46 is 23 bars. Since 20 bars are already present, 3 price bars remain.... so w.v should be retraced by 10:30 am EST. As with any time relationship, it's not an exact science so I would give the relationship some leeway. 

The second scenario is a fourth wave triangle where the pattern is not complete but should resolve to the upside tomorrow after a small decline to complete w.(e) either in the ON session or early on in the day session.

As soon as I can determine which scenario is correct I will update readers with either upside or downside targets.

Best of Trading