The key to an EW analysis of the current situation is the classification of last week's rally into the Thursday top: is it a corrective 3 wave move or a 5 wave impulse? If it's corrective then it can be viewed as an "X" wave in an ongoing correction sequence dating back to the Sep 14 high, if it's impulsive then it's either a 1st or 5th wave (more on that later).
Looking at an hourly chart it appears impulsive, and breaking it down into a 10 minute chart confirms that impression (btw the SPX is much the same):
So the odds on chance is that last week's rally sequence is an impulse. Fitting that into the long term preferred count presents several alternatives. The long term preferred count has the ES/SPX in an ending diagonal "C" wave of 2nd zig-zag of an "X" wave structure off the Mar '09 post crash lows.
The 1st short term alternate has last week's rally counted as the 1st wave in the final 5 wave structure of that ending diagonal "C" wave:
Wave 1 alternate - 2 hour bars
Wave 1 alternate - daily bars
This alternate is eliminated with a print below 1416.50. Friday's low of 1423.50 is perilously close to that point, so the market has to turn up almost immediately next week to keep this alternate viable.
The next two alternates count last week's rally as a failed 5th wave.
Under the 1st of those views the failed 5th wave marks THE top of the entire bull move off the Mar '09 lows:
Failed 5th Wave - alternate #1 - 2 hour bars
Failed 5th Wave - alternate #1 - daily bars
The 2nd of the failed 5th wave views has the Thursday high marking the conclusion of wave "a" of Intermediate W5 of the ending diagonal. If correct then Friday's selling is the 1st stages of wave "b", and the eventual low of wave "b" will usher in wave "c" of Intermediate W5.
Failed 5th Wave - alternate #2 - 2 hour bars
Failed 5th Wave - alternate #2 - daily bars
