Another Elliott Wave Trade in ES
August 10, 2010 1:00 AM

I am finding EW trades more now… This may force me to go back and study Elliott Waves all over again :) I do like when they work intraday, so I can quickly evaluate if my thesis is correct.

Today ES started to sell-off at the open and started to form 0-1-2 setup (ABC) around the mid Fib. Band. This is usually not my typical trade since the pattern formation is around the mid Fib. Bands not near the extreme bands. Anyway, around 10.45am, price formed a small ABC (0-1-2) and traded above mid Fib. Band. This has given me the first clue that it may be the seed-wave (0-1-2) of EW pattern. I quickly started to plot potential Wave 3 range. I suspected the W3 may be between 1123 (127% of 0-1) and 1124.5 (162% of 0-1) setup. About 11.45pm, Price traded at 1124.5 (162%) and started to retrace to the mid Fib. Band (also at 100% of 0-1). Now I was confident that if price starts to rise, it will at least see between 1125 (0.62 of 2-3) and 1127 (0.76 of 2-3) for Wave 5. Just about 3pm, price traded at 1127 and finished Wave 5.

In my view, EWs are hard to detect and very rarely they are easy to spot with naked eyes. But when they do work as today, they really show the power of Elliott Waves and Fibonacci Ratios.

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