ES Morning Update October 1st 2024

We got a small pullback yesterday but then a late day squeeze came in and stopped horizontal support from breaking. This might continue all week long and turn the wave 4 pullback into a sideways correction, which will still be a valid wave but a frustrating one for any bears that are trapped or bulls wanting a pullback to get long at. It could also be just an A wave inside an ABC pullback for wave 4 that could still have a C down later this week to that falling white trendline of support.

This market feels more like it’s just waiting for some kind of news event to rally higher (or sell off?), which might be this Thursdays Jobless Claims number or the Employment Situation on Friday (more commonly called the Non-Farm Payroll Report).

If we go into it with a low then I’d look for the NFP Report to cause another rally after it.   Of course if it’s at a high into it then I’d look for a pullback.  Or, we go into it sideways, which would be the hardest to figure out.  I lean toward that happening as it will keep everyone guessing.  If that happen the market won’t rally much from it most likely because it won’t have pulled back first to get short term oversold.  I’d then look for 5850-5860 to hit the stops above 5830 to be the target.

Then we should reverse back down and start either the wave 4 that I’m looking for, which would be to the falling white trendline, or to start the big drop to possibly the FP on the SPY at 483 as the top “could” be in at that point?  There is no way to really know for sure on the move to 6000+ that many are looking for.  If we drop to the support zone, where the white falling trendline is at,  into next Monday or Tuesday it will be up to the Fed to say something positive on Wednesday the 9th at the reading of the September meeting.

Of course Powell and leak something out at any point really but the market will want to hear that they are doing more rate cuts to get going up strongly again with that 6000+ target in mind.  If they disappoint and say no more rate cuts the market will fall off a cliff and the top will be in I think.  Bottom line her is that I think we need more time to pass before it will finally exhaust itself.  Then a pullback should start of some degree.

Have a blessed day.