Sunday, May 26, 2024

ES Morning Update April 28th 2016


Futures did little to nothing after the FOMC minute yesterday but rallied into the close.  Afterhours they dropped in what appears to be the start of a C wave down.

MACD's are finally showing us some clues from being flatlined the last few days.  Looks like we'll be oversold at the open and try to turn back up at some point in the day.

Ok, yesterday Janet Yellen Yelled and Yelled but bulls weren't listening.  However, the bears were... and while they didn't pounce on her right after she spoke they did pounce on the market late last night after the close, taking the futures down to horizontal support at 2070.  Since that's the first hit of that level since the 25th it makes a double top and should be good support for today.

Here's what I'm seeing... a market that will open and likely retest the 2070 premarket low (could pierce slightly or make a slightly higher low) and then turn back up later in the day.  There's a new falling trendline of resistance coming in just a hair over 2090, but that seems like a dream to see it rally back up that high.  However, miracles do happen is "if" they do get up that high it's the short we've all been waiting for...

I think what we have at yesterday's close, or the afterhours high, was the top of a B wave that started at the 2070 low on April 25th.  The A wave down then was from the 2105 high on April 20th, which suggests we are starting the C wave down today.  In that C wave there should be 5 smaller waves.  The wave 1 looks to have happened afterhours and will give us our gap down at the open.  If we retest the 2070 area again after the open then that should end the wave 1 down.  The rest of today should give us a wave 2 up (inside the larger C wave down).  That wave 2 might breakdown into some smaller waves as well, but after it ends we should see the wave 3 down inside the larger C wave down.

So, when will all this happen?  My best guess is that this wave 2 up will breakdown into some ABC pattern or something.  We'll see the A up and B down today, and then maybe the C up early Friday to end this wave 2 up.  Then the wave 3 down should start later in the day on Friday if all goes well.  This is just speculation of course but right now it's looking good that we topped yesterday into the close and will just start making lower highs from here on out.  I'd look to short the bounces, but know that this move up today might have a higher high Friday morning (below that new falling trendline in the 2090 area) before this bounce is over with.

Author: Red

Related Articles


Latest Articles