In the rally off the Jun 25 low, the ES looks to be in the 5th wave of the sequence. This would be Micro W5 of Minute W1 under the bullish alternate. 5th waves often equal 1st waves in an impulse, Micro W1 = 26 points, so on this basis starting at the Micro W4 low of 1349.50 there is a target of 1375.50 for Micro W5.
Within Micro W5, Nano W1 = 11 points, so applying the same analysis then starting at the apparent Nano W4 low of 1363.75 a target for Nano W5 is 1374.75.
So the ES 1375 area could provide strong resistance and turn the ES lower.
EQUITIES vs CURRENCIES
The European troubles are certainly an influence on US financial markets. A lot of folks like to keep a sharp eye on the Euro and US$ for clues to US equity trends. The prevailing theory is that the US$ is inversely related to the ES/SPX and the Euro is thus positively correlated. And that is true from time to time on a very short term basis. But it might be good to examine the next two longer term charts and ask if that's true in general, and also whether it's a reliable approach to trading decisions.
