ES Morning Update May 24th 2023

We had a decent pullback yesterday, and we hit the rising yellow gold rising trendline perfectly. As I thought it didn’t hold as we dropped through it here in the premarket session.

We should bounce some today but how much I don’t know? They put a FP out on the SPY after the close yesterday at 416.28, so if we get a bounce that’s the target high zone for it. Whether it bounces or not I still then the rising yellow gold trendline will break and we’ll drop back into the 4120 zone where there’s much more support from that 2 week period of chop that built the diamond pattern.  Call it 4100-4140 on the ES roughly, and that’s where a better bounce should happen I believe.

Here’s the FP, which I posted in the chatroom yesterday…

Eventually though I think we hit the rising light blue trendline but that might not happen until the end of the month… not sure? Cycles suggests that is the time period to hit the low, which goes into early June too. Let’s just call it a window from about the first of next week until the end of the first week of June for that rising light blue trendline to get hit.

As far as today, if yesterday was some kind of wave 1 down then the FP on the SPY could be the wave 2 up target, which leaves the wave 3, 4 and 5 down to hit the rising light blue trendline to appear in the coming week or so.

Don’t forget that today we have the prior readings of the last FOMC meeting, which really should be a non-event, but the market still like to wait to see if something new is said.  Maybe we continue lower in front of it and rally back up afterwards as we’ll likely be oversold on the RSI by then.

Anyway, for today there’s that FP on the SPY as a possible upside target. I don’t have much else to add. There’s still room for more downside today as the RSI on the 6hr char still isn’t yet oversold, but getting close. Lastly if the ES loses about 4120-4130 then we should drop hard to that rising light blue trendline. Have a blessed day.