ES daily 02/22: We are in (C) wave, when/where will we bottom?
Well, until last Thursday, I still believe the big (B) wave was not done and we were going higher to 4640~4680 next to finish it, then down to Jan low for a big (C) wave to complete the whole pullback. However, Friday we broke 4354.5 low made on last Monday, and it was then followed by further break 4300. This confirmed we are already in (C), so it's better to check what would be likely path next for this (C).
From fractal point of view, the two fractals most close to the current one would be Aug~Sept 2015 and Feb~Mar 2018, both holding the previous low. 2015 one took 9 trading days for (C) while 2018 one spent 14 trading days, we already spent 7 trading days in general market and 8 trading days in future market, which means a long lasting bottom is close and likely to be hit between this Thurs/Friday and next Friday. Technically if we are following 2015 one, we could already hit the bottom, but it is so rare that (C) wave is not even 61.8% of (A), also since (B) only retraced 61.8% of (A), I would assume a retest of Jan low at 4200~4220 range would be the minimum for this (C) wave, a more possible path would be targeting lower low at 4100~4150 or even lower range around 4000. For this reason, I would be watching if we could hold 4250 before a sustained break of 4390~4410 range, if this happens, I would start to accept that a bottom may already be hit, but before that, especially if below the high we made today, pressure is firmly down. Also the big drop is due to Russian/Ukraine issue, which needs more time to calm down with the damage done, that would lead the similar projection that we will minimally retest Jan low next 2~3 days at 4200~4220.
Another factor is that the bottoming fractal after such big drop at this current level usually would see at least 150~200 pts rally within 24 hours (or better be just within a few hours), recent ones are 01/24 and 01/28, both following this pattern. Right now, the bounce is only 80~100 pts, which is more than likely just whipsaw before another push lower. Whenever we see such big rally in the coming days, I would be alerted that a bottom may be hit or minimally that is the start of (4) and we are just 3~5 days away from the real bottom.
From fractal point of view, the two fractals most close to the current one would be Aug~Sept 2015 and Feb~Mar 2018, both holding the previous low. 2015 one took 9 trading days for (C) while 2018 one spent 14 trading days, we already spent 7 trading days in general market and 8 trading days in future market, which means a long lasting bottom is close and likely to be hit between this Thurs/Friday and next Friday. Technically if we are following 2015 one, we could already hit the bottom, but it is so rare that (C) wave is not even 61.8% of (A), also since (B) only retraced 61.8% of (A), I would assume a retest of Jan low at 4200~4220 range would be the minimum for this (C) wave, a more possible path would be targeting lower low at 4100~4150 or even lower range around 4000. For this reason, I would be watching if we could hold 4250 before a sustained break of 4390~4410 range, if this happens, I would start to accept that a bottom may already be hit, but before that, especially if below the high we made today, pressure is firmly down. Also the big drop is due to Russian/Ukraine issue, which needs more time to calm down with the damage done, that would lead the similar projection that we will minimally retest Jan low next 2~3 days at 4200~4220.
Another factor is that the bottoming fractal after such big drop at this current level usually would see at least 150~200 pts rally within 24 hours (or better be just within a few hours), recent ones are 01/24 and 01/28, both following this pattern. Right now, the bounce is only 80~100 pts, which is more than likely just whipsaw before another push lower. Whenever we see such big rally in the coming days, I would be alerted that a bottom may be hit or minimally that is the start of (4) and we are just 3~5 days away from the real bottom.