Thursday’s trade was a continuation of the triangle pattern in force off of the June 16th low at 3639. It has been a more difficult pattern to trade by nature and while there were opportunities to make some money, the moves were sudden, choppy, and tedious to follow. The ES remains in the process of tracing out wave E of the Minor 4th wave correction.
Yesterday’s trade saw wave A of E form, with wave B of E beginning during Globex and finishing early during the U.S. session. That leaves wave C of E to complete. Wave C started higher off of the 3723 low and looks to be well on the way to Fibonacci resistance at 3823 to 3846. Wave E does also carry potential for a spike like high which could carry prices toward 3863 to 3900.
Once complete the expectation would be for the market to thrust out of the triangle in the direction of the trend, which is down at the moment. Therefore, once Minor wave 4 is complete we will get confirmation of that when the ES thrusts lower out of the triangle breaking below 3723, 3693, and 3639 as Minor wave 5 takes over. Ultimately Minor wave 5 carries the potential for a drop to the 3225 area.