Structures on Futures, Key Reversal

We have had a bullish wedge breakout overnight on futures:

ES

If futures stay strong into the open, this is a very good signal (historically). We retested the 200-Week SMA (again), found support on it (again), and we tested it overnight by being at one point almost 40 points lower. And we’ve now retaken all of that. A key reversal like that is historically a very good signal.

I am itching for us to move on from this godforsaken structure we’ve been in all year, and if the bullish wedge breakout means we’re moving on from that structure, it is probably the end of another structure, and on and on, and so it’s possible that we’re leaving a whole lot of structures behind.

So let’s review the outright bullish count.

On this view, we’re in a large bullish wedge (you can see that more clearly here). I would expect the low from last week to be the low, and the big rally and this retracement to be intermediate (orange) 1 and 2. If so, we are entering the 3rd orange wave, and I would expect it to unfold roughly like this:

SPX

It has merit, and it is possible. Russia signaling willingness to negotiate directly with Washington might be a good sign. If Putin capitulates, prices are going to come down, danger in the world will reduce, things can get real bullish from all that.

Zooming in, if futures retests that little bullish wedge more vigorously, cash session can still see a low lower than yesterday’s close. And it could be this:

SPX

Where yesterday’s spike was an impulse, but one in which the 5th wave was extended (instead of the third) which is why it looks strange. So, if we don’t take out lows, but keep finding support, it is possible that a low is in!


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