ES Futures Volume Teardown Vs. Cyclical Elliot Wave Count
I recently noted that my cyclical Elliot Wave count coincides with the significant volume areas on a volume profile for the ES! futures contract (S&P500).
So, from the top:
So to summarise, it seems that the volume profile for the ES! futures contract correlates to my long-term view of SPX from an Elliot Wave perspective.
I consider this good evidence for my wave count.
We also can see from this how volume flowing into the futures market has tapered off as the market climbed.
There is also a very significant RSI divergence that began in 2018 and is still in place to this day.
My view going forward is that it's very difficult to believe that the minor dip since the all-time-high is going to be the correction to a 14 year bull run.
So I expect further downside to come.
Scenario 1: We have had an A wave down and a B wave up. We are owed a C wave down to the penultimate bottom at between 2000-2800 that are significant volume nodes.
Scenario 2: We have had a Wave 1 down and are setting up for a much larger correction which will see us bottom at the COVID lows, bounce for a few years, and then continue down to the lower range of the chart.
I am unsure which scenario is going to take place, but I am positioning myself for both.
So, from the top:
- 1. is the recent volume high. An influx of volume into the market that has driven the nasty corrective grind since the ultimate top.
- 2. is the value area high as calculated by the volume profile extension. This is where the 2017 highs were found and there was a lengthy sidwards ABCDE correction which I believe to have been a Wave 4 in hindsight.
- 3. correlates to a volume influx that both served as the 2015 top when there was a brief period of volatility across a 15% range (that I believe to have been a subwave 4 correction) and also the COVID sell-off lows (That I believe to be an E wave at the end of a Wave 4 correction that was in place since 2018).
- 4. Correlates to overall point-of-control as calculated by the extension which was the high for total volume between 2008 and present. Wave 1 also found resistance here as did Subwave 1 of Wave 3. Significant volatility in this area as buyers and sellers fought it out but was ultimately won by the bulls.
- 5. Correlates to the value area lows as caclulate by the plugin. There was no special significance of this.
- 6. The ultimate bottom of range. No special significance other than this is the bottom of my sampling range.
So to summarise, it seems that the volume profile for the ES! futures contract correlates to my long-term view of SPX from an Elliot Wave perspective.
I consider this good evidence for my wave count.
We also can see from this how volume flowing into the futures market has tapered off as the market climbed.
There is also a very significant RSI divergence that began in 2018 and is still in place to this day.
My view going forward is that it's very difficult to believe that the minor dip since the all-time-high is going to be the correction to a 14 year bull run.
So I expect further downside to come.
Scenario 1: We have had an A wave down and a B wave up. We are owed a C wave down to the penultimate bottom at between 2000-2800 that are significant volume nodes.
Scenario 2: We have had a Wave 1 down and are setting up for a much larger correction which will see us bottom at the COVID lows, bounce for a few years, and then continue down to the lower range of the chart.
I am unsure which scenario is going to take place, but I am positioning myself for both.