Last week in my post on Thursday: Thurs 5/25 Six Green Daily Candles – Any Pullback? – I was looking for a pullback just below 2404 ES.
Zooming in, I see a 5 wave ending diagonal in 5th wave position for S&P. Overnight, we should consolidate and perhaps in the early morning get towards 2403 ES.
To the right is the daily chart today. Noticed we dropped into that black circle in 2403 ES region – prior resistance level.
Chart from last week looking for the pink arrow:
On Friday, we did not get 2404ES – instead, we only got 2408 ES. However, this week today on Wednesday, we did get that drop just below 2404 ES – and have rebounded from it.
So what that means is that 2408 ES level was the A-wave support — whereas today’s 2403 – 2404 ES is the C-wave support.
So in a way, by not hitting that 2404 ES level last week, the market was saving it for today.
What caught me by surprise was that there was nonstop selling for 35 minutes right from the open – seemingly out of nowhere. And then frmo there, it consolidated. Also surprising was the magnitude of the drop in the Russell.
Even with the surprising speed of the drop, it was key to remain calm and not panic – and remember that the 2403-04 region is support.
Also, that region was prior resistance for the past few weeks – where prior resistance becomes support – to hold the next break out.
Notice most of the rally from 2410 ES to 2414.5 ES happened AFTER the market close at 4pm.
If today’s drop retested the breakout point at 2403-4 ES – and that is the 4th wave, then we should be on our way for the 5th wave up.
I think the opening drop into 10:05 am was the 5th wave exhaustion drop, if my above count is correct. It tested that 1353 TF region and then spend the rest of the day moving up – retracing most of the drop, but not completely.
We may push higher overnight. But there could be a pullback tomorrow morning to the 1367 TF
I initially was looking for a retest just below 21000 — but we got the next level lower (marked in pink) before a rebound.
Looks like we formed an A-B moutain in NUGT with a possible 1-2 today.
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