ES Morning Update January 6th 2023


This mornings update is going to be simple. We've been inside this triangle now for going on 2 weeks. A huge break in one direction or the other is coming, but the "when" part is unknown... but SOON is VERY likely!

FIRST CHANCE:  On Wednesday of this week there was chance for such a breakout if Powell would have added something positive to reading of the minutes of the last meeting in December, but nothing was said and no breakout happened.

SECOND CHANCE: Then yesterday we had the CPI data, which also had the ability to move the market big in one direction or the other, but again, no breakout happened.

THIRD TIME IS A CHARM?  Today we have the Non Farm Payroll Report that could be used as a spark... will it break us out? I do not know of course.

What if I'm wrong and it's the break is to the downside?

This coming Sunday is the 8th and I have a code for that date, which may mean nothing. In fact very few code dates have worked. These "codes" are from movies or TV shows and are often on passports as dates but could just be a date shown anywhere in the movie. So far only 3 have worked.

The 8/24/2015 flash crash had two "codes" foretelling it was coming. One was from a passport in the movie Lucy in 2014, which is why I commonly refer to that crash as the "Lucy Crash".

But the movie "Inception" from 2010 as had a passport with the same date on it as well, so that flash crash had two "codes" saying it was coming.

Then in 2013 we had the movie called "The Purge", which had a scene in it that showed the date 3/21/2020 on a TV screen someone was watching. The crash in 2020 bottomed on 3/23/2020, so it was off by two days, but for all practical purposes that "code" was a signal for the bottom of the crash. Momentum just carried it those extra two days I'm sure.

Of course all the "fake prints" I get are codes too but I never know the dates for them, only that a "turn" will happen when they hit. Fast forward to the present and we have a code from the movie called My Secret Terrius (2018) that is a passport date which says January 8th 2023 on it.

Again, many codes don't work but with the market inside a two week triangle where a huge move is surely coming soon I have too be aware that the move could be DOWN, and down hard... as in a flash crash. I'm positioned heavy long currently as I still think we will break out and run up to 4300 or so for my Tiny Wave C to complete Small Wave 2 up (as shown in the chart below from 12/28/22)

But what if I'm wrong? What if Small Wave 2 up is not subdividing and that it ended on 12/13 last year? If that's the case then we are currently inside Small Wave 3 down inside Medium Wave C that started on 8/16 at 4325.28 (SPX)... which then suggests this two week sideways move is Tiny Wave 2 with Tiny Wave 1 down ending at 3764.49 (SPX) on 12/22.  This chart below explains that wave count again...

That then means that if we break to the downside it will be Tiny Wave 3, inside Small Wave 3, inside Medium Wave C... and that's a "Crash Wave" setup. The dream wave count is to see layers of wave 3's in various degrees overlap each other.

Again, I'm long and looking for a move to 4300 at best case or 3950 at worst case. I could be completely wrong though on the subdividing Small Wave 2 up into an ABC where the move up to 4300 would be the Tiny C Wave. And I could be just asking too much for a lower high rally up to 3950 for a Tiny Wave 2 bounce that will allow everyone a great spot to short the next big drop.

This sideways triangle could very well be a bear flag and that the market is not going to give the bears the strong bounce they want to get short at. Maybe we stay inside the triangle all day today and over the weekend some big event happens (False Flag?) that causes a crash to happen. I don't put high odds on this but I can't go into the weekend without some kind of hedge on the downside just incase something like this do play out.

So my plan is to take a short (again, I'm heavy long now) by the close if we do not exit out of this range cleanly today (3900+). It's not a position I think I'll make money on, but I want to have some coverage in case something crazy happens.

Have a great weekend.

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