In this blog, we will look at how we warned members that rally in ES_F (E-mini S&P 500 futures) last week from April 17 low to April 21 peak was nothing more than a corrective bounce because drop to a new low on April 17, 2022 was in 3 waves and Russell Futures didn’t make a new low. Due to this we were convinced that we were in a 3-3-5 Expanded FLAT Elliott Wave Correction and we expected the decline to resume once 5 waves move from April 17, 2022 low had completed. Let’s start by looking at what an expanded FLAT structure looks like.
Elliott Wave Expanded FLAT Structure
Expanded FLAT can be of two types. Bullish Expanded FLAT and a bearish Expanded FLAT. Graphic below shows a bullish expanded FLAT structure which means once completed, market turns higher. If we turn the graphic below upside down, then wave A would be to the upside, wave B would be to the downside and wave C would be to the upside, this one is referred to as bearish expanded FLAT structure which means once completed, market turns lower.
ES_F 4.21.2022 1 Hour Elliott Wave Structure
Chart below shows decline from 3.29.2022 peak ended as 5 waves impulse structure at 4382.25 on April 12, 2022. This was followed by a reaction higher to 4466.75 and then a 3 waves drop reaching a new low at 4355.50 on April 17, 2022. Then ES_F started rallying again and rally appeared strong and impulsive. As drop to 4355.50 on April 17, 2022 was in 3 waves, we warned members that impulsive rally is nothing than part of a 3-3-5 expanded FLAT correction and should be ending soon resulting in a new low below April 17, 2022.
ES_F 4.24.2022 1 Hour Elliott Wave Structure
Chart below shows ES_F completed wave (v) of ((c)) of the expanded FLAT structure at 4509.09 on April 21, 2022 and went on to make a new low. Chart below shows we are in wave (( iii )) of C so we should see a bounce and 1 more low to complete 5 wave down from April 21, 2022 peak and should ideally end between 4254.85 – 4097.67 and result in a 3 waves bounce in wave (X) or in wave 4 at least correct the decline from 4509.09.