ES Morning Update January 22nd 2026

The market has likely bottomed for the A wave of an expected ABC decline, which will likely drag out into mid-February. There should be another pullback today or tomorrow to make a “higher low” as there’s a new FP on the SPY of 677.58 that appeared after the close yesterday. I suspect the rally up from yesterdays low was a smaller degree A wave inside an ABC to make a bigger B wave up.

That B wave will probably last into early February, and we’ll probably see an A up (in play now from yesterdays low), then a B down (the move to 677.58), and lastly a 5 wave move for the C wave… which ideally fills the gap on the ES around 6975. Below is a chart of the wave patterns.

As you can see the best opportunity will be around the end of this month, or first week of February, where a short for a C wave down can be taken with a known target of 660.08 on the SPY. At that point I’d look for some wave 1′s up and 2′s down of various degrees into the end of February to setup the explosive wave 3 up in March.

That month should be a super powerful, non-stop rally that defies logic and reason. I get the feeling that the chart of the Economist for 2026 is showing the first low in mid-February as the expected C wave down to 660.08 on the SPY. Then the rally up to new highs will be the blow off top squeeze to 7600+ into April/May. After that, the crash like drop will be the move down to retest the coming lows next month. Best guess is that it’s a large A wave of some degree, and the move back up the rest of the year (like into October/November?) will be the large B wave.

Following that is the large C wave down into the end of the year. It doesn’t show it taking out the early low, but again, I don’t have a long enough track record of following the Economist to see if the chart is forecasting higher highs, lows, etc… or if it’s just a directional thing. Maybe it’s not about price at all, and only the “turns”? I just know that at some point we will see the ES fill the gap at 5339 from last year. When is unknown? Maybe it’s the summer drop, or the one into the end of the year? We’ll just wait and see. (no post tomorrow)

Have a great weekend.