Bearish $ES Count Continues to Be My Primary, Bullish Count Still Possible

The bearish count on $ES continues to seem to me to be the more probable of the two outcomes, but golly, I don’t want to be in the unfortunate position of insisting on that for hundreds and hundreds of points. The crux of the issue is the structure at the beginning of the rally: it’s not an ideal bottom. We’re now at a good fib relationship for the B wave of an expanded flat (the orange box we tapped this morning). All we’re missing is some actual selling to take us lower.

From a sentiment standpoint, I’m a little uncertain. On the one hand, around October 12th, it seemed to me that virtually everyone was looking for further selling, which convinced me that we would go much higher (which we have), and I would be more convinced in the bullish case here had everyone not immediately flipped to the bull count once we started heading up so hard. On the other hand, this rally “feels” hated (I hate it, lol). It seems like a lot of people are astonished by it (including me). So, in other words, all I see out there are bullish counts, but I also see a lot of astonishment and disbelief at the rally.

So, at any rate, I think heading much lower is more probable than consolidation followed by new highs, but if we don’t fall deeply below the orange box just below us here, we may have to adopt the bull count as the primary count (it’s more carefully detailed here).

If my minute (blue) a and b are really a “one” and “two,” and my minute (blue) c is a “three,” then we should consolidate in an around the orange box beneath us for the four, before making yet another high. And unless we really start moving lower, the probabilities will begin to shift toward that count.

ES


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