Friday’s trade saw a continuation of the decline with the ES at first making a leap higher before following the NQ lower. I have adjusted the Elliott count and labeling and discuss that on tonight’s update. The primary reason for the change is that Elliott included guide lines and observations for each of the waves within an impulse move and within a countrend move. I continue to feel the ES is within the first 5 waves down on a Minor degree level. Within the move I have labeled as complete Minor waves 1 and 2, with Minor wave 3 beginning at the 4717 high. If count began to give me some difficulty last week after the Black Friday selloff. The rebound off the low brought the ES higher than I would have expected and again would have invalidated the count as I had it — therefore after stepping back and looking more closely at the structure I realized that the ES is likely still tracing out a Minor wave 3 decline but the decline itself is subdividing several time. That is now reflected in the labeling for the ES. The current push higher is likely an additional wave 2 bounce. The current position for the ES would suggest that market is once again sitting on the edge of the cliff and ready to leap off. Once the larger decline kicks in again it would be happening on several layers of “3 of 3” type moves. That should include several strong periods of acceleration lower. There will be approximately 5 series of decline/rally structures to complete before the larger Minor wave 3 is complete. Expect the volatility to again increase in both directions. The following Fibonacci support levels are now all in play as the series of decline/rally unold. Support begins at 4443 to 4400. Then 4258, 4145, 4075 and then 3960. I anticipate it may take some time to get to the lower levels, but all remain in contention to complete the larger Minor 3rd wave. Should the ES reverse and rally higher with strength resistance comes in at 4558, 4575, 4583, and then 4600. A break above 4610 would negate stronger downside for now and force an additional revision of what is next.
December 6, 2021