ES Morning Update June 23rd 2022


A whole lot of nothing yesterday with the market being up most of the day and swinging to down part of the day, but in the end it didn't go anyway. All the gains on the upside so far are from Sunday through Tuesday.

This morning the futures are up again but I'm still looking for one more pullback before the real rally begins. I've been leaning toward Friday but if todays rally holds it might be next Monday before we see the pullback. If it turns out to be just a higher low then it will make a nice inverted head and shoulders pattern with the 3639 low being the head, the 6/14 low around 3728 being the left shoulder, and of course the coming pullback being the right shoulder.

However, it's possible I missed the low and we are currently in the rally up to the falling light blue trendline now. Which, if so, would be the ideal spot to rollover for the higher low to make the right shoulder. That would be fine with me too as then I'd call the first move up a wave 1 of some degree, the pullback a wave 2, and I'd be very happy to catch the wave 3 up (currently I'm thinking we are in a wave 4 and a wave 5 down is still to come).

The point here is that a pullback is still very likely coming, so now is not a time to go long. Whether that is today, tomorrow or Sunday/Monday I don't know? And I don't know the price level, but I do know the resistance zone (the falling light blue trendline).

Odds of it getting through it on the first hit are very slim. And a common trick is to fall shy of it because everyone see's it now. Doing the pullback prior to hitting it will increase the odds of getting through it on the next hit as it will have reset short term overbought charts thereby giving it more power on the next trip back up... and will hit it at a lower level since it's continuing falling as time goes by.

It's a waiting game at this point. One last pullback is needed before a much stronger rally happens, which again should be the first half of July with the second half still being strong but chop can happen.  Whether that is a lower low for some 5th wave or that count is busted and it's a higher low for a wave 2 is still unknown, but technicals say a pullback is still coming.

The strongest advance should still be the first half of July, and that's where the falling light blue trendline should be hit... but again, that's not a guarantee as it could be hit in the next few days?  Then, if strong enough we could see it run up toward the falling dark red trendline into mid-July.  However, I'm really leaning toward that attempt to happen in August. Only time will tell.  Have a blessed day.

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