ES Morning Update September 4th 2024

Boy, when the market decides it’s ready for a pullback it really delivers. I was looking for yesterdays move to be drawn out over 3-5 days as that’s the period of expected weakness, but yesterday was a nasty drop and has pretty much hit my target zone.

So, with more “time” left the market could go lower, but we are oversold on the short term. So I suspect there is little left on the downside before a bounce, but we might not see the low for this move until this Friday or early next week when this weakness people ends. If yesterday was an A wave then we should have a B up start soon, like possibly today. Many B waves are drawn out in time and full of traps for bulls and bears both, so it could last into this Friday?

If so then I’d look for the C down to happen into early next week to complete the wave 4, and it could drag out into next Thursday if it wants to fool the most. There’s a lot of “time” left for this bearish window, and while it should be finished by next Monday or Tuesday I wouldn’t be shocked to see it linger into Thursday. I don’t have a target for the low but with so much time left I have to think we could reach 5400, which is roughly the 50% retrace level.

On another note, I want to put this out there as it just came to my mind yesterday. I was just thinking about those 2 Yahoo FP’s from March and April this year, which were point to the 483 on the SPY. It reminded me of the 2018 FP that I found on February 27th, which was an upside fake print then. It took until September 20th of that year before it was hit, and it pierced by just 4 cents on the SPY.

Here’s that old chart…

So what if that Yahoo downside FP takes about the same amount of time to get hit? It was roughly 7 months (205 days to be exact), so what is 205 days from the first FP on March 1st, 2024? It is September 22nd, 2024, which if I’m wrong on this pullback being just a small one before a larger rally (meaning we keep dropping), I’m going to be looking for that 483 FP to get hit around that date.

I don’t expect this pattern to repeat though as I have NO prior history of such things happening. But the FP’s “do” get hit at some point in time. So for now I’m just sticking with a small pullback and then another rally up into the end of this month or earlier October. Everything looks to me like we’ll drop hard into the election, and if we get up to “just under 6000″ prior to then, a drop to hit the FP on the SPY would be a very nice drop and totally possible. Just food for thought.

Have a blessed day.