ES Morning Update October 25th 2024

The market held up as expected yesterday, but today and into Monday could go either way. Monday is a turn date, so if we go into it with a high then it should be a top, and if we go into it with a low it should be a bottom. I think it will be a low but I’m not sure if it’s going to take out the Wednesday low or not? It might be a higher low, or just slightly lower (meaning not anywhere near 5700). I say that because the short term charts are bottoming on their RSI and MACD and look like they are just a few days away from a strong turn back up. Let’s start by looking at the 1hr chart below.

As you can see it made a higher low on its’ RSI and MACD from Wednesday to Thursday, so it’s trying to hold the low and push up. For today I’d like to see it get overbought on the MACD (and RSI too, but less likely), which would be similar to the 10/4 to 10/6 period. In fact, I kind of think the market is going to follow that pattern. Next let’s look at the 2hr chart below…

On it you can see the RSI and MACD have bottomed and are grinding higher up from that Wednesday low. This upward pressure should continue but it doesn’t have the strength to last too long as the 4hr (and 6hr) haven’t turned back up yet. Let’s look at that chart next…

Now you can see what I’m talking about the MACD is still pointing down ot the 4hr chart and while the RSI has made a bottom, and came off of it, I think it needs to make a higher low on it before a strong turn up can follow. But it’s getting very close now to a turn back up that will last awhile, and with Monday being a turn date I have to think that’s when it will happen. And now let’s look at the 6hr chart…

It never quite got fully oversold like I had hoped it would, which a move to 5700 would have done it, but I don’t think that’s as likely now. We’ll know on Monday what the low will be but I suspect it won’t break below Wednesday low of 5801 as the technicals look very similar to the 9/26 to 10/7 period, and I further think that we are not in Small Wave 4 down now.

I think it’s only Tiny Wave 4 and that we’ll go up after Monday to make another higher high (but not 6100+ yet… that’s later in December), which should top around the election. That’s where Tiny Wave 5 should end and complete Small Wave 5 inside Medium Wave 3, and then we can have a good pullback for Medium Wave 4, which will likely be an ABC and last into mid-late November. Possibly around the 22nd or so? Let’s look at Wave Count below on the Daily Chart…

There is a Fibonacci Extension Target of 6009.50 that I think will mark the high into the election.  While you can’t see it on the Daily Chart you can see it on all the other time frames, so just look at other charts to know what I’m referring to.

Think about how hitting that target and dropping for Medium Wave 4 would fool everyone into thinking the market has topped and it going to start a recession now.  But it won’t be finished yet on thee upside and from whatever low we get there we’ll have one more rally to the FET of 6082.46 or 6189.54 into early December.  That move will squeeze out all the bears and get everyone thinking the low is in now and it’s off to 7000 or more… but that’s shouldn’t happen.

If I’m right that last move up will top out Medium Wave 5, inside Large Wave 5, inside Extra Large Wave 3, and a surprise drop in December will shock the market for Extra Large Wave 4, which can easily be a 20% drop, and that should reach my FP on the SPY of 483… and that might be right into Christmas again like 2018, who knows?

If this plays out then Extra Large Wave 5 up will take the market to crazy new highs into the 3rd quarter of 2025 before topping out… and then a crash can follow, as well as a recession.

Lastly, as for the low of Medium Wave 4, I have a FP of 533.01 on the SPY that “might” be the target?  If so, it’s a massive “buy” for the last move up to either my FET at 6082.46 or the one at 6189.54, and that should be right into the first week of December.  With all the war stuff going on in the world right now I would not be surprised to see another False Flag happen on December 7th (Pearl Harbor) to blame the expected drop for Large Wave 4 down.

Have a Great Weekend.

Source: http://reddragonleo.com/2024/10/25/es-morning-update-october-25th-2024/