ES Morning Update December 26th 2023

It’s time to revisit the bigger picture, so I’m going recover my Primary Elliottwave Count on the daily chart, which I’m labeling the Large Wave 5 up ended last week at the high on the 20th for the ES and that we are about to start a 6-8 month drop to reset everything before another 5 wave series starts and last for many years.

Although this is my Primary Wave Count I’m still puzzled by the wave count for the year of 2022, so I’m going to cover my Secondary Wave Count later on in this post as we could be on it, instead of this one.

If we’ve finished 5 large waves up then possibly the drop this year will be 3 large waves too?  I’m not sure what to call it but really doesn’t matter for traders and it should unfold in an ABC with A wave having 5 waves, the B having 3 and the C having 5… the common pattern. But it will be super tricky of course, and catching all the moves will be next to impossible.

My goal over the coming 6-8 months is to just trade the larger moves in the A down and the C down and do nothing during the B wave, which should last 1-2 months… probably April and/or May.

The coming A wave down should finish “as early as” the end of February, but more likely mid-late March. The first wave 1 down inside that A should reach the 4300 zone where there’s a good amount of volume that will support it. That should happen over the next 2-3 weeks, starting this week.

Then a strong wave 2 back up should happen that will be a fast squeeze to fool everyone into thinking the low is in, which will likely go into OPEX in January. After that the wave 3, 4 and 5 will last into early March and should reach the 3800 zone where the next large volume area is at.

After that the B up starts and I will not be trading it as I think it’s going to be very hard to figure out. Finally the C wave down takes us into Summer where I think we will revisit and pierce the lows from 2020, but we’ll talk about that when and if it forms.

Now lets go over my Secondary Wave Count, which has the Large Wave 4 down NOT ending at the 3500 low in 2022 but only the Medium Wave A inside Large Wave 4, which then makes the entire drop for 2022 a clean 5 wave structure, and that’s how it should be for a wave A of any degree.

It makes a lot more sense to be on this wave count instead of my primary actually, but I’d have to allow a “throw over” wave up for Medium Wave B on the ES, the DOW cash and futures, and the Nasdaq cash and futures too.  The SPX cash did not make a higher high (as of right now) and of course the Russell wasn’t even close.

This is allowed with Elliottwave, and therefore I must cover this wave count too as it could be the correct one.  The biggest clue will be during the April May period as “if” we are on the Primary Wave Count the Medium Wave B up will likely be 50% (or more) back up, which if that’s from say 3800 then 4300 or higher would be the zone.

However, if we are on this Secondary Wave Count then the first 5 waves down to the 3800 zone will NOT be Medium Wave A but instead Small Wave 1 down, and the bounce for Small Wave 2 up will be weak, like 23.6% or 38.2%… not 50%+!  This will be a HUGE clue to pay attention to in the month if April and/or May.

I actually am leaning toward this Secondary Wave Count being the correct one because I think more time is needed for the Large Wave 4 down to unfold, and 2 years would make more sense as then Large Wave 5 up could run for 4-8 years.

Ok, that’s my big picture thoughts.  The day to day moves are super hard to figure out (duh) and while I’m still super bearish I must calm my excitement and give this more time to unfold.  So I don’t see 4000 into the end of this month as that’s just too fast for what little time we have left.  I see about 4300 into the second week of January.

Have a blessed day.