ES Morning Update September 27th 2024

Today is the last day of the bullish cycle on the daily period. It’s been in a bearish cycle on the weekly period for awhile now but that takes time to align up with the daily period, and that’s coming next week. Just like small, medium and large waves there are periods of bullishness and bearishness of larger and smaller degrees.

The weekly bearish period cycle takes awhile to really get going and it’s not really started yet. The “cycle” is bearishly aligned but since the daily cycle is still bullish the market can drag out into late October or even early November if they really do plan on hitting that 6000+ I spoke of yesterday. That’s really impossible to know for certain but I want to keep it as “possible” going into October.

AskSlim did a great job of showing how we could pullback into early October and then bounce back up for a lower high (his thoughts) into mid-late October and then do the larger drop late next month or November.  Here’s his video…

The Speculation…

What I’ll be looking for is how fast the coming pullback happens. If it’s really fast, which spikes the VIX, then that should wake up the bears and cause a ton of them to pile in short, which if that is at the 533.01 FP on the SPY, where two trendlines of support are at… I could then see another new high. The next Fed date is 10/9, which is just a reading of the minutes from the September meeting, but sometimes they give out new breadcrumbs of what’s coming in the future.

I would not be shocked if Powell mentions another .50 cut is coming at the November meeting. If he says that then that will be the fuel needed for the rally to 6000+ as the market “front runs” the event. Then when it happens at the 11/7 meeting the market tops and tanks afterwards. But if the market declines in a slower manor in the beginning the bears will keep buying it (and the bulls) thinking there’s another higher high coming into the election.

If that happens there should not be another higher high and we should be going down to my yahoo FP of 483 on the SPY. It’s really a tough call here to figure out but I’m leaning toward the 6000+ move because of how the Fed’s seem to be trying super hard to keep the market up into the election for the Demoncrats. Then we tank after Trump wins (I pray he does), and they get to blame it all on him, which of course it won’t be his fault but they will say it is anyway.

Back to the Technicals…

Another reason I’m starting to think it’s possible that 6000+ happens into the elections is that the weekly (and daily) charts need to get a little more overbought in my opinion. It’s more of a gut feel based on past technicals as the monthly chart has reached the overbought level with it popping its’ head over the 70 level on the RSI yesterday to hit 72.20 or so. I don’t know if it’s going to hold up into next Monday when the month closes or not but it’s there now, so this market is very close now rolling over and starting another recession like 2022.

Of course the monthly time frame is not used to pick an exact date for the final top but it is suggesting that we are near the end of the bull market since the 2022 low. We could easily extend into November before it does, so it’s important to remain open. The pattern looks a lot like the 2022 top right now, which stands out like a sore thumb I think.

Every trader must see it so I don’t know how they can repeat it exactly. In fact if it did repeat the first move down would be to the 483 FP before any strong bounce. Maybe it happens, who knows? But it’s so obvious to me right now that I just can see them making it that simple.

Have a great weekend.