SPX Futures: Leading Diagonal into a 1 or A? Downside ahead.
The analysis of the S&P 500 futures (ES) presents an intriguing scenario for traders, especially those new to the market. Let's break it down in a way that's easier to understand.
Understanding the Market Movements
Five-Wave Decline: The ES has seen a decline in a structure that can be described as a 'five-wave' pattern. In market analysis, a five-wave structure often indicates a complete cycle of market movement in one direction.
Complex Correction Possibility: Initially, there were indications of a complex correction. A complex correction in market terms refers to a price movement that doesn't follow a straightforward pattern and often involves multiple peaks and troughs.
Impulsive Move Upward: Recently, there was a significant and rapid upward movement, known as an impulsive move. This was the largest of its kind in about a year, suggesting a potential change in market sentiment or dynamics.
Current Scenario - ABC Correction: Based on the recent price action, it seems we're in an ABC correction phase. This is a common pattern in market analysis where the price movement is divided into three parts - A, B, and C. We seem to be completing the B wave.
Wave A: Completed in a leading diagonal pattern.
Wave B: Currently in progress.
Wave C: Expected next, which might lead to higher price levels temporarily.
Future Predictions and Risks
Potential Downturn: There's a looming financial crisis and geopolitical tensions, which could turn the current Wave B into a Wave 2, leading to a significant sell-off and a new downward wave (Wave 3).
Primary Count - ABC Correction: The primary expectation is still an ABC correction, suggesting a rise to around 4400-4500 levels before a decline.
New Lows Possible: If the downward trend continues post-correction, we might see new lows below 4100, possibly nearing 4000.
Santa Rally: A short-term rally is anticipated, likely ending well before Christmas.
Key Dates to Watch
December 7: Futures roll date, marking a shift from one futures contract to another.
December 15: Futures expiration date and a potential turning point for increased volatility, including in cryptocurrencies.
Advice for Traders
For beginner traders, this analysis suggests caution and vigilance, especially around the mentioned key dates. It's crucial to monitor market news and global events, as these can significantly impact market movements. Remember, while predictions and analyses are useful, the market can always behave unpredictably, and risk management should always be your top priority.
Understanding the Market Movements
Five-Wave Decline: The ES has seen a decline in a structure that can be described as a 'five-wave' pattern. In market analysis, a five-wave structure often indicates a complete cycle of market movement in one direction.
Complex Correction Possibility: Initially, there were indications of a complex correction. A complex correction in market terms refers to a price movement that doesn't follow a straightforward pattern and often involves multiple peaks and troughs.
Impulsive Move Upward: Recently, there was a significant and rapid upward movement, known as an impulsive move. This was the largest of its kind in about a year, suggesting a potential change in market sentiment or dynamics.
Current Scenario - ABC Correction: Based on the recent price action, it seems we're in an ABC correction phase. This is a common pattern in market analysis where the price movement is divided into three parts - A, B, and C. We seem to be completing the B wave.
Wave A: Completed in a leading diagonal pattern.
Wave B: Currently in progress.
Wave C: Expected next, which might lead to higher price levels temporarily.
Future Predictions and Risks
Potential Downturn: There's a looming financial crisis and geopolitical tensions, which could turn the current Wave B into a Wave 2, leading to a significant sell-off and a new downward wave (Wave 3).
Primary Count - ABC Correction: The primary expectation is still an ABC correction, suggesting a rise to around 4400-4500 levels before a decline.
New Lows Possible: If the downward trend continues post-correction, we might see new lows below 4100, possibly nearing 4000.
Santa Rally: A short-term rally is anticipated, likely ending well before Christmas.
Key Dates to Watch
December 7: Futures roll date, marking a shift from one futures contract to another.
December 15: Futures expiration date and a potential turning point for increased volatility, including in cryptocurrencies.
Advice for Traders
For beginner traders, this analysis suggests caution and vigilance, especially around the mentioned key dates. It's crucial to monitor market news and global events, as these can significantly impact market movements. Remember, while predictions and analyses are useful, the market can always behave unpredictably, and risk management should always be your top priority.