If we don’t make another high on $ES, I must listen to the fact that we only have a 3-wave move to the upside, which is corrective. Now, if we’re in intermediate 4 (as many Elliotticians believe we are) (that’s the orange 3-4 you see on the chart) we can proceed down to the box and then have a long rally lasting probably months before we have a very significant market top. But if oil is right, we may only be conducting a two here.
At any rate, so long as the 3-wave bounce from lows does not become a 5-wave move, we may proceed to the lower end of the channel. If it’s an A-B-C (in green) as I’ve labeled it here, C should be a big 5-wave impulse of its own. We may be in “1” of that now. If this count is the correct count, the first reasonable rally may be an excellent short.
The alternative bearish count is that it’s not an A-B-C, but an W-X-Y. At any rate, it’s pedantic, but the difference would be that the move lower would be conducted in 3-waves and not 5.
The essential takeaway here is that the move off the lows is in 3-waves and these are some alternatives to think about in case we can’t take out yesterday’s high.