Thursday, June 13, 2024

ES Morning Update February 21st 2024

From the February 12th high of 5066 the market has been pulling back in what appears to be an ABC move with the 5059 high on the 16th being the B part and the current pullback being the C wave. I don't know if it's finished or not as most C waves subdivide in 5 waves, so the move up from the close yesterday might be just a wave 2 inside that C down... or it ended at low on Tuesday.

The line in the sand I think is the current all time high of 5066 and the 5059 lower high, as if the market rallies up over them today, tomorrow or Friday then obviously the ABC down finished and another strong leg up in the market will be in play. So the 5059 level must hold to keep the bears in control as a lower high below that amount should then be a wave 2 inside the C wave down.

The short term charts are oversold and support a rally today/tomorrow but the daily is still closer to overbought, even with yesterdays pullback, (but the trend is still up). We have  news events like the FOMC minutes from last month coming out today at 2pm, and then NVDA earnings after the close today, that's 2 things that could move the market both directions.

Based on the technicals I'd think that the FOMC would cause a rally up into the close where the 5059 lower high will be the decision level. If it fails to take out that level then the earnings from NVDA after the close could cause the market to gap over it tomorrow, or to reverse back down on Thursday, which could be a wave 3 inside a C wave?

That move might be the move that ends Sunday in the futures or Monday morning to complete all 5 waves in the C wave of the ABC down. But if the 5066 high is taken out then the squeeze up much higher should top us on Friday and then a small pullback in the 25th/26th would be likely I'd think to still make a low in that turn window.

However, if by some crazy move up into a top on Friday, that then goes slightly higher into Sunday/Monday then that "expected" low for the turn window will become a high instead, and sell for a much deeper pullback. I don't think that will happen but it's certainly possible. I lean toward the 5 waves down in the C wave of the ABC down, which should bottom in the turn window, which is my logical thoughts of course.  Oddly my gut tells me we are going to make a new high.

I'm still long and riding it out as I'm still focused on the top into March 22nd, which could be 5200-5300 I think.  Everything this week is done to shakeout bulls and bears alike, so I have to just stand my ground and let the bigger picture play out, which is still up I think.

Have a blessed day.

Author: Red

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