The Morning Started Scary...

So when I woke up this morning and checked the futures and found ES sitting at 800, I was more than a little surprised. Fortunately, I was in at 804, so although my profit was gone, my loss was still little. I thought I would give it 10 min and see what kind of strength we could pull off the opening. I closed out my longs around 811, went short around 815 and then closed those out around 810 when the move down lost steam. I put my longs on again with a stop at 807. Looks like I never had to use them the rest of the day!

After the day was over I relooked at the chart. A few things popped out at me, that I'll show you in these charts.

This is a 15min chart showing that my previous wave 4 label was a bit premature. This labeling actually works better because it gives us some nice alternation between waves 2 & 4, which is common: w2 was a zigzag and w4 a triangle. The other thing is that triangles are ending patterns and are recognized by their extreme moves after they finish in both directions. Once the w5 thrust finishes, the trend promptly reverses. We have all of those characteristics here.


This next chart is just bigger picture view showing that we should see significant strength early next week.

This is a daily chart. We have a similar pattern showing up here that also supports our thesis. As it happened in early December when the bears tried like crazy and couldn't get it price to break the key level. The bulls finally wore the bears out and got a nice little rally off of it. Of course the bears won out once they rested, as they will here. Let's just say the next time we visit ES 800 it won't be pretty.