ES Morning Update May 20th 2025

Another snooze fest yesterday as the market refused to fall much, but didn’t go up much either. It’s very clear that the market is super tired here, but bulls don’t die easily. We can linger around for another week inside a 300-400 range, like between 5600-6000 basically. We are at the top end of it, but at some point soon we’ll see a pullback to the lower end, and then back up next week for another try to reach the all time high, but I don’t think it will happen.

Once the first pullback is done (a wave 4) the wave 5 up next week can go a little higher then the peak this week, or it can truncate short with a lower high. Remember that next Wednesday we have a reading of the minutes of the prior FOMC meeting. While I don’t expect anything to be added the market still tends to “just hang out” in a range until after it passes “just in case” the Fed does say something new.

Therefore I still think the best opportunity to short will be next week. Possibly we pullback this week to the 5600 zone, and then go back up to 5800-5900 next week? The after the meeting we start down in a more steady decline to see if the 5600 zone of support can break.

If it breaks then the 5400 area where that gap is at will be the target. If it gets hit late next week or early the following week there will be too much “time” left for the market to decline, so while we should bounce from there that “bounce” will need to hold all the way into mid-June for the bearish period to expire. Can it hold that long? I don’t know? If it does then look out for a big squeeze up into early July for the blow off top to play out (as covered in my prior Bullish Wave Count and/or the “If 2020 equals 2025″ chart).

However, if that zone breaks we could be back to the Bearish Wave Count where a new low is coming into mid-June. I don’t know which one will happen, but I’ll be paying very close attention to how much time is left in the bearish period, as that will tell the real story of where it’s likely to go. As for today, I don’t have any foresight to whether or not we will pullback or chop more. But a pullback to the 5600 zone this week is still likely.

Have an blessed day.