ES Morning Update December 7th 2023

Ok, we are starting to see some “possible” changes to the wave count now that moves my completion of Tiny Wave 1, inside Small Wave 3, inside Medium Wave 3, inside Large Wave 5… which was my original thoughts several weeks ago. I kept looking for an ABC down for Tiny Wave 2 but instead got all this sideways chop that makes you frustrated and ready to give up the forecast. In the chart below I’ve moved T1 back up to the current high and that means we are likely in T2 down now.

This change opens the door for a possible low between this Friday’s NFP (Job’s data), the CPI next Tuesday, or the FOMC on Wednesday. One (or more) of those events seems likely to put in the bottom, which could be back down to my original target zone of 4470-4500 on the ES.

We are rolling now into the March contract for the ES, so those numbers might be off by the time the roll is finished, but it’s still a general zone.

Basically, we topped for Extra Tiny Wave 5, to complete Tiny Wave 1, at 4607 on 12/1, then dropped for ETA on 12/4 to hit 4553. From there we rallied to 4598 yesterday morning before the open… which ended ETB up. This puts us in Extra Tiny Wave C down now, and it should further subdivide into 5 waves down.

The first wave, Super Extra Tiny Wave 1, should hold the current support around 4542 I think. A move back up for SET 2 should follow for another lower high then 4598, which ended Extra Tiny Wave B up. I don’t know how high that rally will be but it should stay under that level. Possibly it’s a reaction to the Non Farm Payroll report this Friday? Who knows for sure? If so, then the rollover that follows should be SET 3 inside Extra Tiny Wave C, inside Tiny Wave 2.

That one could happen from the CPI next Tuesday, which should also have the bounce for SET 4 up and SET 5 down all play out before Powell speaks on Wednesday. Meaning that we could finish Tiny Wave 2 down, which would unfold in 1wave down for Extra Tiny Wave A, and 1 wave up for Extra Tiny Wave B, and 5 waves down for Extra Tiny Wave C.

That would leave the FOMC to be the catalyst to start Tiny Wave 3 up inside Small Wave 3, inside Medium Wave 3, inside Large Wave 5… and the Seasonality Chart is super bullish the second half of December too, which supports that kind of wave setup.

Again, counting the smaller degree waves is very hard, and trying to match them up with events that could cause them is always a “best guess”. I do not know how this is all going to play out but what I’ve just proposed makes a lot of sense, which is why I’m talking about it. It was also have every bull throwing in the towel to see another failed move up tomorrow (or today) and another drop to a lower low (then 4542) would have the bears piling in super short looking for a crash. It’s the perfect setup to trap the bears short before a massive squeeze while shaking out all the bulls.

Have a blessed day.