ES Morning Update August 21st 2023


The market fell again on Friday and the FP's on the SPY and QQQ were both hit and slightly pierced... but the gap fill on the ES wasn't, so odds are that we still have one more drop today (possibly tomorrow?) to fill it and flush out the last bull.

I wouldn't be surprised if we do it today and recover back up into the close to put in a nice bottoming tail candle. Target is 4300-4325 on the ES as that should be enough to get everyone calling for a crash again, which will fuel the rally back up over the next 2 weeks. How high we go I don't know? Most are just looking for a retrace of 50%-61.8%, or some other Fibonacci Level, and then a crash wave down afterwards (like an ABC down from the July 27th high).

I've found it's never that easy as if it were all the bears would be rich, and SkyNet isn't about to let that happen. If there's any kind of nasty "C like" wave down it will be after they squeeze the bears out.

That suggests we could double top by hitting the upside FP's on the SPY and QQQ that project to a slightly lower high on the Nasdaq and slightly higher high on the SPX. That's all just speculation at this point but I wouldn't be shocked if it happens. It won't be easy to figure out of course, but possibly we get an ABC up into mid-September whereas the A up stops at that 50%-61.8% Fibonacci Retracement Level... like into Labor Day?

Then tease the bears with a pullback for a higher low for the B wave the following week. After that a C up to the double top to squeeze them out, which could happen into mid-late September, like into OPEX possibly on the 15th, or the VIX OPEX on the 20th?

Then we could drop into October for a move below 4300 to shake out the bulls and lure in the bears again at the bottom. Maybe it goes a little lower... I don't know? But right now I just can't see the bearish case happening where the October 2022 low is taken out. The DOW is just too strong and is clearly not in a bearish alignment. It's the leader here and is very bullish... even with this pullback we've been inside of.

We could pullback into the 200 SMA into early October I guess, which might be around 4200-4250 (ES) by then? That could be all she wrote before the big squeeze up into the end of the year for new all time highs. Again, all speculation... but based on what I see in the charts right now everything still looks bullish on the big picture.

The market remains above the 200 SMA on all the major indexes, which is bullish, and short term we are just in a correction right.. nothing more. Anyway, for today (or tomorrow) I'm looking for a bottom in the 4300-4325 ES zone, and then a multi-week rally. Have a blessed day.

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