ES Morning Update January 3rd 2019

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So far so good for the bears at least. The market took the bearish path yesterday by not taking out last Fridays high and then selling off into the close but closing green. Then afterhours it dropped more and again did not take out the afterhours/premarket low from Monday to Tuesday. Now it's bouncing back up some in the premarket session from a deeper low earlier this morning.

This should be setting up another wave up and wave down, which again if it doesn't take out yesterdays high and closes green again today (preferred but not mandatory) then bears will have pulled off another perfect setup for a wave 3 of 3 (or 3 of C) down to start on Friday. I should know more by midday today but you are a bear you want to root for a green close but just barely, and ideally below the 2520 high yesterday on the SPX.

If you are a bull then you'll root for a down day that closes below the low yesterday as that could kill (or delay to reset it for some future date) the bearish setup forming right now. For example, a drop down to hit the falling trendline (pointing to just below 2400 right now) would be perfect for the bulls to rip it higher on Friday and into next week. But if the bears want to drop it hard they will be working on setting up a wave 3 of 3 down into Friday by closing it up today to get the wave 1's and wave 2's out of the way and all set up in perfect alignment so a big drop will follow. Good luck to both you bulls and bears out there.