ES Morning Update August 7th 2025

Well… my wave count got busted yesterday as the high of my wave 1 got taken out, which now opens the door for the market to be in an ABC up now for a larger B wave… which might reach a double top? Then we get the C down to take out the low to complete a larger degree wave 4. My wave count from yesterday had the wave 4 completing already at the low last week but now it’s looking like it’s subdividing into an ABC that should put in a slightly lower low in the coming days. Here’s that new chart below…

Now I’m also covering the other possibility that the larger degree wave 4 did bottom last last week and we are in a wave 3 up inside the final wave 5, which is shown in RED on the chart. It’s very similar to my chart on Monday, Tuesday and Wednesday, except it ended the smaller wave 2 pullback already, whereas I was thinking it was going to unfold in an ABC down and that we should have a C wave for a higher low still coming. I thought we’d see it Thursday/Friday, but that can’t happen now as it will be a different wave if we get any pullback at all today and/or tomorrow.

It’s going to be hard to figure this out going forward but we should pullback at the double top for some amount to give us a clue. If it happens early next week then I think it will be shallow and that we will be on the wave count in RED, whereas the move down is a wave 4 and a wave 5 up will take us to the 655.66 FP on the SPY into next Friday or sooner. But if the pullback starts today or Friday we might get the C wave down to end the wave 4 where we could reach a slightly lower low. If that happens I don’t see the FP on the SPY hitting by the end of next week, but I guess anything is possible?

I get the feeling we will hit the FP into early next week, then pullback small for a wave 1, and back up for a wave 2 into Friday. Then we’ll get a much bigger drop starting the week of the 18th, which then could reach the 588.79 FP on the SPY. The wave 5 up (in RED) will complete an even bigger wave pattern where we then drop into a low on September 18th to complete a much larger degree wave 4 (ABC probably), and the gap fill around 5300 is very possible. Then the final 5th wave up to 7500-8000 starts and goes into the first quarter of 2026.

The point here is that many people are now looking for a C wave down in the coming days to complete a wave 4 so they can get long for the wave 5 up… which most assume will be a major new high. But I have the FP of 655.66 on the SPY (6600 ES?) for an important top, and it might be at that level that the real wave 4 down starts that most think is already in play now. Yes, it’s a smaller degree wave 4, but many people are looking for that wave 4 that goes to the 200 day SMA and/or the 5300 gap fill level. That should come, but probably after we hit the upside FP on the SPY first so that the smaller degree wave 4 and 5 can complete to allow a bigger (abc) wave 4 pullback to play out.

Have an blessed day.