Chop, chop and more chop...
The market is frustrating both bulls looking for a breakout and bears looking for a breakdown. But a big move is coming soon, and there's very high odds it's to the downside. The ES hit a rising trendline yesterday morning in the futures and bounced off it into the open and then chopped around all day. This rising trendline has a falling trendline overhead, which together make a triangle pattern.
Once it breaks down the fall should be fast, and that breakdown should occur next week. Prior cycles show a bounce is possible from yesterday into Monday the 13th, but I doubt if it's a whole lot. Most likely it's just a move up to hit the lower falling trendline, which would be around 7590 if hit today, or slightly lower if hit Friday. I really don't think it will drag into Monday, but it's possible.
I suspect they will top it into Friday to lure in the last bull looking for a breakout, and shake out the last bear looking for a breakdown. That way they can use the weekend to release some kind of negative news so that Monday opens with a gap down. The bears will have missed it, and the bulls will be trapped long.
The drop should be scary as we should hit the 7000's by Thursday the 16th, where we could see the 692 FP on the SPY hit? Or that target is saved for the 23rd where the last low should be at, with a bounce after the 16th for a few days, followed by a capitulation flush out into the 23rd to hit the FP. It could hit the FP on the 16th though... that's certainly possible.
If so, the 23rd will be a higher low, but either way the move that will come out of the low on the 23rd will be a major one as it should rally into mid-September where the 787.13 FP on the SPY should be the target high. The coming down move next week is going to fool a lot of people, but I'm positioned and ready for it.
Have a great weekend.
