ES Morning Update January 18th 2024

We finally broke-down and lost the rising dashed orange trendline of support, which too me seals the deal on the top being in now. Yes, there will be strong bounces but I don’t see any new all time high coming… just teases to get everyone thinking it’s still coming. I’m going to cover 3 charts in this post, which are the 1hr, daily and weekly chart on the ES.

Looking at the weekly first you’ll see my overall thoughts on the coming few months. I’ve drawn lines on where I think we’ll make “turns” at but that is just a “best guess” of course. I won’t know until we get closer to each one and see where the technicals are at, as if they are not oversold enough then of course we could go lower.

Next let’s look at the daily chart below. On it I think we will bottom by the end of next week around the 4550-4600 zone, which might get pierced through to trap the bears that short it. Then a rally back up into mid-late February in an ABC probably. Late February and into March is where we should get a much deeper drop to retest the 10/27/2023 low… which should again get pierced through to trap shorts.

After that we should get another rally but that’s not known right now how much it will be. I’ll just have to wait to see everything play out in February before I can figure out March and beyond.

Next is the 1hr chart, which suggests one more move down this morning to complete a 5th wave inside a 3rd wave. Then I think we rally up into Friday for the wave 4, which should be another lower high.

If I had to guess on the target I’d say 4780 to maybe 4800 on the ES, which will be a bull trap this time… and one that might happen in the close Friday as well? That will keep them long over the weekend, but if my read on the technicals is right we’ll drop next week for a wave 5, and it should be down to test the 4550-4600 zone.

Have a blessed day.