Nov. 8th – ES

On the ES, I want to show you the daily chart today with the cloud. We were working with two different counts, our alternative being the red count. Looking at the price structure for the move up from ((4)), we can see that this has the look and feel of a impulse wave, working on wave (3). The first correction is not in the middle but at the beginning of the move up giving us more confidence in this interpretation. Now looking at the cloud, we can see that the two moving averages are moving up and they are also moving further apart, this shows us that the momentum is strong. The cloud itself is rising and the lagging line is still far away from leading span B. These all indicate that sentiment is bullish and momentum is still strong in this direction.
We can also see that the final channel has served as resistance for almost the whole move up, so we can expect that it will provide resistance again and we might see current wave (3) end in that area. Combining the channel and the matrix, I am expecting wave (3) to end around 4740-4790 levels. The correction for wave (4) should probably find support around the slow moving average of the cloud before finalizing the move up for (5) of ((5)) after we will see a larger correction.

The reason to keep the red count alive on the chart is that the RSI is not confirming our preferred count and is signaling us that it is working on a wave ((3)). The strong momentum shown in the cloud also can be read that way.