ES Morning Update May 7th 2024

Another nice up day yesterday. It’s truly amazing to see it reach my 5192 target, and pierce through it. From everything I see there’s really nothing left on the upside here as it will be like picking up pennies in front of a steamroller because the nickels, dimes, quarters and dollars have all been picked up already.

I took another short yesterday and will be adding my last one today so I can average into my position. We have a big drop coming and it should happen this week. My biggest worry is that they hold it up all week as then the drop could be much larger then just down to my 2 FP’s on the SPY, which are new to me as they are from Yahoo and not Think or Swim. So I don’t have a multi-year track record of them being accurate like all the FP’s on Think or Swim.

But again, just what’s the odds of 2 of them being put out pointing to the same area and disappearing the next day? I have to give them attention as they also align up as the expected target from prior declines in the past. Like for example, this decline looks similar to the 9/3/21 ABC correction into the 10/4/21 low, and for that low the first A wave drop was followed by a similar 61.85+ rally, which then was followed by a C wave down that equaled about 75% of the A wave.

I find it common that in many pullbacks inside a larger bull market, in where it’s an ABC, the C wave is truncated short of the A wave. That was the case back then and could be the case now too? Ironically the 75% mark down for the C wave coming next is about where the FP will be at. The MACD’s and RSI look similar to back then too, so there are many reasons to suggest we will have another leg down before this correction ends.

Nailing the exact day it turns down though isn’t easy, but we should be finished now as the 61.8% retrace level has been hit and pierced. Nothing left but some chop I guess, or just rollover and start the decline.

Have a blessed day.