ES topped yesterday the biggest wave 3 at 2071. The drop from the high has confirmed that we are now seeing wave a of wave 4 that might take a complicated form or a simple a-b-c correction.
The simple a-b-c form is presented in the above chart. We expect a fast drop in the lower bound of the bollinger (23% correction from the beginning of wave 3) until market open and then slow move toward 2045-2050 for the b wave of 4.
Wave 4s are difficult to trade because they might take different forms (flat, zig-zag or a triangle) but we expect this scenario to play out.
How are we trading
We are buying at 23% retracement with stops very tight and we will eye a 50% move up from that low.
A jump over 2045 would confirm that wave a of 4 is completed. Long trades will be initiated with stops at previous low.