ES Morning Update September 1st 2022


Even more downside yesterday it seems. This is getting a little bit worrisome for the 4400+ by the middle of next week. Possible? Yeah... but not looking promising. I posted this in the chatroom yesterday and I still feel this way.

Kinda running out of time for this rally to start... at least if it's going to end by next Wednesday or so. I'm going to have to rethink the possibility of it being a "truncated" Small Wave 5 again.

On the 7th the falling red trendline will be around 4270, so if on that date we hit it and it looks like the short term charts are overbought again, I'll be leaning toward that being it... meaning NO 4400+!

This "time period" is where we should see it top out. If we are up near that falling red trendline of resistance going into Wednesday I think it won't breakthrough it. This weekend is when the squeeze should happen, so next Tuesday should be up big and near that resistance line (or thorough it). So Wednesday should just be the stop run above the 4327 top of SW3 up.

The point here is that the big move will very likely happen over the 3 day weekend. Where it's at this Friday will be a clue to tell us (give us better odds) whether or not it going to be a high at the falling red trendline (4270 or so) or 4400+ for the stop run.

Tomorrow must rally and so must Friday for this to play out. If we continue to drift down again tomorrow and Friday then we could be flipping the cycle and we would then see a low into next week instead of a high. This is why I would never risk trying to go long this final SW5 up as you don't know if it's going to truncate short, run the stops, or flip the cycle. Best to wait until next Wednesday and see where we are at. If a flipped cycle then we'll be at a bottom and therefore a long will be the play. But I sure hope that doesn't happen.

I would hate to see this invert as I was really looking forward to a short next week. Still possible but this market needs to get back up around 4100 or so (at least) by the close this Friday I think. From that level it could do a 200-300 point squeeze into mid next week. We've seen 200 point days so that's not out of the question.  Nothing more to do but wait and see at this point.  Have a blessed day.

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