The Bearish Version of the Triangle Idea from Earlier

Earlier, I pointed out what I think may be a triangle forming on $ES. And in that post, I suggested I would expect it to be a 2, but after thinking it through again, I realize there is also a very bearish alternative that can make use of a 3-wave move here. It would be a broadening top. And that would be a fitting, volatile conclusion to a market we all thought had ended with what we took to be a broadening top on a greater scale from 2018-2020.

On this view, we could fall to the target below, then rally in 3-waves to intermediate (orange) 5. That wave need not take out the all-time high in price, as these can fall short, though in this nutty market, hell, maybe we even overshoot the structure.

So, if we even do fall out of this triangle I think we’re in now, we would simply need to watch the rally from that low carefully, to see if it was a 3-wave move.

ES


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