ES Morning Update November 15th 2021


This week is of course the monthly option expiration week, or more commonly referred to as OPEX. Normally it's a bullish week but I'm not expecting that to happen this time around. We started a move down last week and had a nice oversold bounce on Friday, which is likely a B wave of some degree, and not the start of the next big leg up. Could we bounce around some more this week?

Sure, anything is possible but the overall picture still remains bearish. The charts are all at extremes in complacency, which is going to limit the upside until a nice correction happens. The coming correction should be around 5-6% and from that low we'll have to see how bearish people get to try and figure out if that's a bottom and we are off to 5000+ or if it's just an A wave down in a larger correction of 15-20% into late December.

I'm still concerned about some surprise drop in December, like what happened in 2018, but until we get past the first drop it's all just a hunch. For this week though we could see some more choppy sloppy range-bound moves until OPEX passes. I remain bearish here, even if they do a fast one day squeeze higher this week to squeak out a new high. That doesn't change the bigger picture here.

Yes, it would stink for those short as the waiting the drop to start part is very frustrating. And trying to nail the exact day the market tops out is next to impossible. It's better to just average into shorts I've found, but that's just me... everyone it different and should always do whatever is comfortable for them. If we are going to get a 15-20% correction then it should happen in December, and that means we need to get that first 5-6% drop done in November, as that will be the A wave down where everyone goes long at the bottom assuming 5000+ is coming next.

But if I'm right we'll just get a strong bounce of 50% or so for a B wave, and then the C wave down takes us below 4000 into late December. This correction is the most healthy thing for the market as everyone will get bearish at the low and that will fuel the next 1000 points up... and a likely a whole lot more. Have a blessed day.

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