ES Morning Update May 25th 2023

Yesterday the market fell through the rising yellow gold trendline as I expected it would and pierced the falling green trendline a little but bounced back up and found support there. This morning we see the market rallying back up and is currently trying to get back through the yellow gold trendline.

It’s a backtest of it basically as I don’t see it getting through it today or tomorrow. There’s no support here or stops to run as “those stops” were already ran with the two day squeeze last week when the diamond triangle broke out last Wednesday and topped at 4225 the day after on Thursday.

Today and tomorrow I don’t see much on the upside or downside, but that FP on the SPY could be hit at some point in the next several days… maybe today, who knows? It’s not too far up higher from the current level here in the premarket as the SPY is at 414 and change now.

The FP is a little over 416, so that’s about 20 more points on the ES/SPX roughly. It would be through the yellow gold rising trendline, but again, I’d call that a pierce only as there’s no support to hold the market up there… let alone rally back up to the 4225 high on the ES last week.

I would be interesting in selling some call spread if we hit the FP on the SPY as while I don’t see the low yesterday being taken out for a week or more I do think we won’t go up above the FP and hold up there to build a base to try for the 4225 high again.

Basically it means I think we will be in a range below the FP on the SPY (roughly 4175 ES) and the low yesterday today, tomorrow and probably into early next week too. If the drop we just had was an A wave then we in the B now, which should last for awhile to frustrate bears trying to short it. Like maybe a week or so… I don’t for sure? It will be more of the chop like what we recently from 5/7 to 5/17, and then when everyone gives up we’ll see the C down to the rising light blue trendline. Here’s a chart I posted in the chatroom yesterday showing those projections.

Nothing more to add here today is again likely to be choppy. I have no positions but will look to sell premium if we hit the FP on the SPY via a call spread, which isn’t quite like a short, which requires it to go down to make a good profit. This it just bet that we don’t go up much over the FP and stay up there for the next two to three weeks, as at some point we’ll see the C down. Have a blessed day.