ES Morning Update May 12th 2023

The more the market chops the higher the odds of another squeeze move. Does go up to the rising white trendline on the wedge, or just the FP on the SPY is the question?

The FP on the SPY at 416.29 (normally all FP’s are pierced if hit) equals about 4172.31 on the SPX. As of the close today the ES Futures is running 14.63 points higher then the SPX, so that’s 4186.94 on it to hit the FP on the SPY. Again, most FP’s are pierced through, but that’s the area to look for if we have another squeeze day.

The Jobless Claims are out today at 10am EST, so maybe the market uses it to pop one more time… who knows? From a technical point of view the MACD’s and RSI are mixed on the very short term (hours to days) and mixed on the short term (days to weeks), but the market is in a weak period from a Seasonality point of view until late May… plus that 4200 zone overhead is a big wall of resistance.

Therefore odds still favor another move down in the next week or two. Now the intermediate term (weeks to months) is bullish, so even if we get a nasty drop there’s still high odds of a move back up in the summer time to break-through 4200 and runs the stops overhead.

Possibly Wave Count…

I’m just patiently waiting for some kind of move higher so I can get short. I’m sure everyone sees the wedge pattern now and will look to short a hit of the top of it, and while that could happen I would not count on it. SkyNet doesn’t make it that easy, so a more likely move is just to the FP… possibly close there today to keep everyone long over the weekend looking for a break-through next week?

The 4/18 high of 4198 (ES) and the 4206 high on 5/1 is a double top, which all pro traders know to short a double top on the first hit. However, a third hit of the zone makes a triple top and have 50/50 odds of holding and reversing back down versus busting through. The Seasonality and the Cycles all suggest it fails as we should be going down over the next half of May, so this triple top should hold and reverse back down.

I’m sure if the opposite was true, meaning the Seasonality was bullish and so was the Cycles, then odds would favor a break-through. But that’s not the case right now. Therefore I remain bearish here and will look to short any rally up to the FP today or next week, but it should be sooner then later. Have a great weekend.