ES Morning Update April 17th 2023

Last week did pretty much what I expected, but held up longer then I would have liked. I was wanting to see it start down on Thursday or Friday so that it could bottom by this Tuesday or Wednesday, but instead it held up nicely all week long and didn’t start that move down yet.

That just pushes out the time line a little I think were we might not see a low until this Thursday of Friday, so nothing big really for a change. Overall the big picture is still the same as a pullback to 3950-4000 SPX is likely this week. However, it’s more likely to be more shallow, like 3980-4020 SPX I suspect.

Then back up into the end of the month to revisit and try to break-through the 4200 zone of resistance. I doubt if we do it in front of the reading of the prior FOMC meetings minutes this coming May 3rd as traders will be waiting to see if the Fed adds something new that it viewed as positive for the market. I doubt if anything is say extra as I suspect they continue with the current path of raising rates. That news should keep the market from breaking through that wall of resistance overhead and making a run to 4300+, but I won’t rule out some stop run over 4200 that is fast and short lived.

Basically like what happened in the futures before the cash open on 12/13/22 with the CPI number. While I don’t think that will happen after the FOMC coming up I wouldn’t be shocked to see it either.

That move could reach 4270-4280 on the ES (4230-4240 SPX) before it reverses back down quickly to close under 4200. From there we should see another choppy period with a drift back down into the 4000′s into mid-late May as the market digests what the Fed said. And if this all happens as planned then we’ll see a strong push up to 4300+ in front of the June FOMC as traders front run an expected “pause” by the Fed at that meeting.

This scenario aligns with cycles of weakness and strength and the “reason” could be anything but the what the Fed says will most likely be what it gets blamed on. I’ll refer you to last Mondays’ post for more details as not much has changed since then so I don’t have anything new to say. Have a blessed day.