ES Morning Update January 7th 2022

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We didn't get much of a bounce yesterday so possibly we see a decent one today. The overall pattern though is still telling me we are in a downtrend until the end of this month and that bounces are just shorting opportunities. Resistance on the upside is this falling dashed green trendline. Yesterdays brief rally was likely some kind of A wave and the drop this morning a B wave, so the C wave could be next and should run out of steam if it makes it up to the resistance area.

If we don't see it today then I'd look for it on Monday. But again, it doesn't have to play out as they have bulls trapped and bears looking for a decent bounce to short... which means we might not get it? I just don't know? I only can say that this sideways movement yesterday and this morning is a bear flag that can breakdown anytime it wants.

It's just like the bull flags trapped the bears with no good pullbacks, this bear flag can do the same thing. If today is sideways into the close then that will be the best torture for the bulls wanting out and the bears wanting in... then Monday can continue lower without a good bounce, which forces bears to chase and bulls to experience more pain. Have a great weekend.

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