ES #F 100206 A New Day

Possible 5 waves down from 1350.50 high into GL of 1343.50. The waves are corrective in nature. IF we have 5 waves down, THEN look for abc correction back to the .618 fib level of 1347.75 ish. Higher timeframe charts remain bearish at this point. Early signs of possible support seen on 8min and 6000V chart for the moment. Things to watch out for this morning -- 1) we have a gap above to fill at 1345.50 2) we are at important LIS of 1343.00 yet again 3) start of new month and new quarter 4) if 1343.00 LIS breaks, next tgt is the 1340 LIS.

Update at 09:31 EST: Gap is now filled. Resistance now at OP and .382 fib level of 1345.50, which is .382 fib of last move down.... This wave could be extending, so Sell short against OP and hold for lower. We had a 5034 sell short pattern off both the 8min and the 6000V charts. The only concern is that we have mixed signals, so not the best trade setup. Downside tgt for now is the 1340.00 LIS, then lower.

Update at 09:55 EST: market waiting for 10:00 reports to come out. Mixed signals now. A little more difficult to determine direction.

Update at 10:24 EST: Double bottom for a long entry. Look for test of OP and current high at 1346.00. This is looking more and more like a consolidation wave ... perhaps wave B triangle pattern formation? IF that is the case, then lower lows is the outcome. Disregarding wave counting, the indicators say that we have more upside. Thus, we have mixed signals ... so caution is in order.

Update at 11:46 EST: .618 fib tgt of 1347.75 hit; Mixed signals now and narrow range, so more dangerous and high risk low reward; need to identify the "ends" for higher probability entries.

Update at 12:45 EST: Sell short entry against test of 1348.25 high.

Update at 13:41 EST: short term support off 1344.50, which is a .786 fib level; expect lower to 1340.00 LIS test.

Update at 13:49 EST: Short term support off 1341.50 which is a 1.414 fib level. We had impulse wave down into suport. Expect is to range then go lower.

Update at 14:02 EST: 5 waves down into 1340 LIS. Expect some kind of retracement or profit-taking here. Potential PRZ here as: 1) big LIS 2) 1.414 fib 3) .618 fib of last move up into 1350.50 high. IF we have 5 waves down, THEN look for abc pattern into the .618 fib level. No buy patterns yet off higher timeframe charts; remains bearish still.

Update at 14:55 EST: 1339.25 is .382 fib level for support for time being. 60min chart remains mega bearish.

Update at 15:15 EST: long off double bottom at the .382 fib level of 1339.25.

Update at 15:55 EST: Resistance at a .382 fib level at 1342.75. Sell pattern off both 8min and 6000V but 15min has no signal.