ES Morning Update May 4th 2023

Yesterday didn’t do what I thought it would as I was expecting the recent low in the overnight session to hold, but we went deeper and then did a lot of up’s and down’s throughout the day, and finally closed down.

I still think we are near a short term low and that we’ll rally some into next week before rolling over for another leg down into late May. So the medium term picture hasn’t changed, but getting the day to day moves is very hard.

Today we have the Non Farm Payroll report out before the open, but we are very close to oversold now on the 6hr chart with the RSI, so even if it goes down a little lower today we should turn back up next week and retrace at least half of this down move, maybe more if the FP on the SPY is a real one? As I’ve said many times some intraday fake prints are really not fake prints at all, but late fills by some market maker that missed closing out a trade and does it after the close.

However, I’ve noticed that they still seem to get hit within a few days or so. Maybe it is the high for the bounce coming next? I don’t know but they won’t make it easy to short the last drop into the end of the month I don’t think. A retrace all the way back up to that FP would be around a 90% one from whatever low we put in, and that would fool everyone (again) into thinking we are going to break-through 4200 and run on up to 4300+… again, “if” we hit it?

I don’t know for sure but with next week being OPEX I doubt if there is much on the downside as they will want to kill all the bears who took puts this week looking for a crash. Time will tell. Have a great weekend.