$ES - Market Analysis on Oct 2nd, 2018

Futures are trading slightly lower this morning, with price once again testing the limits of support on this pullback off yesterday's high. So far support continues to hold though, with price bouncing off the uptrend line and .618 retrace.

Therefore, as long as the overnight low at 2917.50 ES holds, probabilities remain in favor of further upside as wave (c) of 5 to visit one more all-time high from here before a more significant top. Assuming continued cooperation, price should be filling out the initial wave 1 of (C), ideally reaching a little higher near-term before consolidating in wave 2 of (C).

Otherwise, if the overnight low at 2917.50 ES is unable to hold, that is our first warning sign of a potential breakdown in progress. After that, a break below last week's low likely seals the deal for bears and leads to a full retracement of the entire September rally.

ES Z18 - Micro - Oct-02 0555 AM (1 hour)
ES Z18 - Micro - Oct-02 0555 AM (1 hour)
Garrett Patten is a senior analyst at ElliottWaveTrader covering both U.S. and international equity indices as well as stocks.