Monday’s trade was not surprising except for the opening in the ES, where the buyers made a valiant attempt to push the market higher against all odds. Obviously, that didn’t work out very well, but it did provide for some excellent early entries for short positions. The ES did however continue lower as expected as the Minor wave 3 continued to pick up the pace, and the minute wave 3 also picking up the pace. The wave patterns remain consistent with 5 waves down and 3 waves up leaving the downtrend in place.
For tomorrow I will be looking for the downside to continue as minute wave 3 unfolds. Within minute 3, the sub minute degree waves look to be within sub minute wave 5 down. For now, I’m still looking for a break below 3700 to put in the bottom of minute wave 3 and set the stage for a minute 4th wave countertrend correction. With the larger trend remaining to the downside and the sell pressure likely to remain strong as well I am not looking for a stronger bounce just yet. In fact, the hourly 20 MA has yet to be challenged during small up swings over the last 3 sessions.
Support should continue to be found at 3715 to 2700, 3690, 3617, 3549, and then 337. Again, resistance at the moment should continue to be held by the MA’s.