SPX E-Mini (ES_F) Elliott Wave: Unveiling the blue box buying strategy

In this technical article, we are excited to present another recent Elliott Wave trading setup. Our focus is on the SPX E-Mini (ES_F) futures, which have recently given us a clear three-wave pullback, unfolded as an Elliott Wave Zig Zag pattern. Notably, ES_F completed this correction precisely at the Equal Legs zone, commonly referred to as the Blue Box Area. In the following sections, we will delve into the specifics of the Elliott Wave pattern observed and discuss the corresponding trading setup in detail.

ES_F Elliott Wave one hour London chart 04.02.2024

The decline from the peak looks like a 5-wave structure, suggesting that the pullback is still underway. We assume that the correction is unfolding as an Elliott Wave Zig Zag, awaiting confirmation of another leg down (c) of ((ii)) ideally. We do not recommend selling ES_F ; instead, we prefer positioning ourselves on the long side if an opportunity arises.

ES_F Elliott Wave one hour Midday chart 04.02.2024

We’ve seen another leg down as expected. The price has hit our target area, the blue box zone at 5248.69-5216.4. We’re entering long positions within the Blue Box. As the main trend remains bullish, we anticipate at least a 3-wave bounce from this area. Once the price touches the 50 fibs against the (b) blue connector, we’ll make positions risk-free and set the stop loss at breakeven and book partial profits. Breaking below the 1.618 Fibonacci extension level at 5216.4 would invalidate the trade.

Quick reminder on how to trade our charts :

Red bearish stamp+ blue box = Selling Setup
Green bullish stamp+ blue box = Buying Setup
Charts with Black stamps are not tradable. 

ES_F Elliott Wave one hour Asia chart 04.04.2024

ES_F has found buyers and is showing a nice reaction from the Buying Zone. We count the pullback ((iv)) black as completed at the 5235 low. Consequently, long positions should now be risk-free. We are anticipating a break of the ((iii)) black peak to confirm that the next leg up is in progress. Alternatively, if the price breaks below 5235 low, the futures will open up the possibility for a 7-swing pattern. In that case, long positions will be stopped out, and we will look to buy the dips again at the next set of equal legs.

Keep in mind that market is dynamic and presented view could have changed in the mean time.