ES Morning Update February 8th 2023

This is a game of patience right now as SkyNet keeps trying to shake the bears out with all these crazy moves up and down, up and down many times each day since the high last week. It’s a fight between the bulls and bears for sure but it’s more then just that. It’s a sign that a big directional move is coming soon and nothing I see suggests it will be to the upside. I still see a 150+ one day drop coming, and that’s just the start of the move as it should be followed by many more nasty down days.

There’s just nothing bullish here at all. This is the ending period for the rally up, not the start of a new big rally to 4300, 4400 or higher. The only thing that could change my mind is if enough time passes to reset all the overbought conditions on many time frames, and that should take 2 weeks at least. So if the market goes sideways in some range for that long and resets the charts then I’ll change with it, but currently that’s not the way the charts are aligned, therefore I remain bearish.

I’ve seen this kind of wild action up and down intraday many times before and it always lead to a big break one direction or the other.  In fact the last several days of intraday moves look like a compression of the two week period in December where the market stayed in a range from 3800 to 3900 before it broke out.

Moves like this aren’t normal… except right before a big directional multi-day move.  It can continue again today I guess but it’s super close to a breakout or breakdown of this chop.  Plus we have the market in a triangle as well and near the APEX where it must break one way or the other.

While I would have liked to see this break sooner it’s really following a common pattern where turns don’t happen the week of the FOMC meeting (so the Fed doesn’t get blamed) but holds in place for about a week and then makes the next big move.  So it’s just a game of patience right now as it’s coming but guessing the exact date it turns isn’t easy.  Have a blessed day.