The overnight drop in the futures still leaves open various interpretations of the elliott wave count. Here's a 5 min chart of ES showing one of them:
ES 5 min chart:
I've changed it from yesterday (which had us looking for a possible 2nd wave bounce), to the more bearish nested ones and twos I showed in the Option 3 chart of SPX last night. This implies a long way down to go.
However, there are less bearish possibilities which could mean that after a quick drop to complete a 5th wave down, which may be all but done in the futures, we see a large retracement up in a 2nd wave - see Option 1 for SPX.
On the more bullish count, see the alternate shown on the above chart, the overnight decline would be wave (C) of [Y] of ii, completing a second zig zag down from the 21 June high. If that is the correct count, the 21 June high is likely to be taken out, even if we are only completing wave [ii] up (as Option 2 on SPX suggests). See Option 5 on SPX for an even more bullish count which implies new highs above 1219.80.
So I'm going to be on the alert for signs that this decline marks the end of the decline from 21 June and may lead to a more significant rally than we have experienced since then. I'll be watching all of those levels identified in last night's SPX update and keeping an eye out in particular for that 1042.17 level which is currently so important to the more bullish counts.
