ES Morning Update October 4th 2021


Last week my primary computer went down. One of the Solid State Drives (SSD's) died on me. I have everything backed up on a hard drive but they are super slow and the Think Or Swim charting software uses up a ton of memory and you just can't hardly do anything on a slow system. That's why I never did any posts on Thursday and Friday last week. Today my primary computer is still down but I ordered a new SSD so I should be back up and posting normally this week when I get it and fix the computer. For today I'm using my backup computer.

So let's get right into it. The market dropped lower last Thursday then that prior low and found support around 4260 which was right at the dashed rising purple trendline. Where does that come from you ask? It started at the May 1st 2019 high and connects to the February 2020 high, so quite a strong and important trendline I think. Friday gave us a nice bounce off that trendline and it went higher in the futures Sunday, but this morning we are backing off some and down a little. There's a light blue falling trendline above near 4440 (if hit today) that I think a lot of people are hoping we'll reach so they can short it. But I find that too easy and SkyNet never makes it obvious.

And when I look at the wave structure I don't see the drop from the first hit of that trendline (around 4470) from 9/27 to the low last week as being a completed C wave down. I do see the bounce up into that trendline from the first low (4293) on 9/20 as some kind of B wave, with the A wave starting at the all time high of course. This clearly points to us being in the C wave down currently, but I don't think it's complete. The A wave was 256 points (4549-4293) and this C wave so far has only reached 212 points (4472-4260). That's not enough and keep in mind that C waves commonly reach 1.618% of the A wave, not just a "one to one" match. SO it should do 414 points in total if it's just a normal C wave.

Some do 2.0% or 2.618% of the A wave, which would be 512 points or 670 points. One of these numbers is needed I believe to complete this C wave down. Currently I think the bounce on Friday was some kind of smaller wave 2 up inside this C wave down. When it finishes, and I don't see it reaching the perfect shorting spot from the falling light blue trendline, a wave 3 down inside this C wave should follow. That could start today, so be cautious out there. That's all I have for now. I'lll be back to normal soon. Have a blessed day.

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