ES Charts & Morning Update:

The recent strong move to the downside has removed any possibility of an immediate impulse count higher in the ES and considering the continued downside price action has now made the smaller ending diagonal count where this move lower would count as the C Wave of the IV very unlikely. IF we still have higher levels to come in the ES before we see the start of a much larger correction then the recent low counts as the bottom of an A Wave down of a larger Wave II within an even larger Ending Diagonal Pattern in the ES.

If this is what is unfolding then we should see the ES rally back up to the 76.4% retrace level at ES 2890.00 before a further large decline in the C Wave of the II which then targets ES 2640. Looking at the Daily Chart for this count we can see that it suggest a very choppy ride to the upside with large swings along the way. The expected target levels for the completion of this diagonal would be between the 138.2% and 161.8% extensions which are at ES 3221 & 3332 respectively and thus have excellent confluence with the 2.00 Extension we have been looking towards from our weekly Chart of the SPX.

The move up from, the low made on 11th October this weeks high was likely the Sub Minuette Degree Wave a and the subsequent pullback which hit the 61.8% retrace of that rise at the overnight low just seen low the retrace in the Sub Minuette Degree Wave b. Now looking for the ES to continue higher again the the Sub Minuette Degree Wave C of the larger Minuette Degree (b) Wave. Thus far we appear to be seeing an impulse structure to the upside unfolding for the potential Micro Degree Wave 1 up off the overnight low. We need to see the ES complete a full 5 Waves up the hold a standard retrace fib on the pullback as a Micro Degree Wave 2 next.