ES Morning Update October 1st 2020


The ES Futures stopped shy of the even number level of 3400 as expected and so did the SPX. I had the 3380 area as resistance and it went past it a little but not much, so that worked well for the bears that took a short as late in the day the market dropped back down to that 3320's before finding support in a couple of moving averages.

The early low in the premarket yesterday (3291.25 as 2am) very likely completed the small wave 4 down, and started the small wave 5 up. The hard part about trying to forecast correctly with Elloittwave only is that waves can subdivide and subdivide catching traders on the wrong side if you don't include other methods of analysis to try and filter that out and increase your odds of getting it correctly.

Today is a perfect example as while I still think there's high odds of this being a small wave 5 up it could be subdividing into 5 tiny waves. When I look at the daily chart of the SPX the MACD's are curling up but the Histogram Bars are flat, so it could go either way here with more upside or just rollover again. Therefore that chart isn't much help. Here on this 30 minute chart of the ES Futures the MACD's are going sideways and the market is above the moving averages, so that's bullish until it fails.

The hard part is timing out when it does that failure. For me, whenever I get in a spot where I don't see a clear direction I simply sit on my hands and don't trade until I get a higher odds setup... which is what I'm going to do now. What I think is happening here is that the small wave 5 up is indeed subdividing and the tiny 1 up started at the 2am low of 3291, ended at the high yesterday, then drop late in the day for the tiny 2 down and that puts us in the tiny 3 up today.

This suggests a tiny 4 down at some point soon (today or early tomorrow seems likely) and then the tiny wave 5 up after that. If we don't pullback much early this morning then this tiny wave 3 up could reach the 3420's before running into resistance (the 61.8% Fibonacci Level on the ES from the 3198 recent low is at 3429.42 with the 50% level at 3384.41). On the SPX that 61.8% level is at 3442.36 from the 9/24 low). My thoughts are that this subdividing small wave 5 up will end around that resistance area.

I'm not sure how the tiny waves will play out so my focus will just be on hitting those Fib. Levels. What I suspect is a pop higher Friday on the Employment Numbers to hit those levels on the SPX and ES and then start down next week in some ABC pattern for medium wave 2 down.

I've been thinking for a long time now that we'll top out in mid-late October (3635 SPX is my target, up to 3680), but watching this market extend with subdividing waves I'm starting to think we'll get through October and into November before we top out.

Yeah, I know the election is likely going to be a big mover in the market but what if it's a "dud"? Or what if we top right before November 3rd, drop some after the election as the Democrats delay the counting of the votes for a long as possible, and then rally back up to high that target area in late November with a Trump victory? This is very possible I think but again I'll stick with my targets and try to figure it out once we get closer.

For today though I'm not interested in doing anything. I'll just wait and watch to see if we hit the 61.8% Fib level tomorrow to complete this move up from the 9/24 low and then look for a short into next week for the expected ABC medium wave 2 down. Have a blessed day.


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