ES Morning Update January 5th 2024

Ok, the RSI is still oversold on the 6hr chart, and we did bounce some yesterday… so that might have been the Extra Tiny Wave 2? It’s unknown right now but today should give us the answer. If we head down then our wave 2 was finished, and if we he up again then our wave 2 is still in play.

The daily chart is still putting downward pressure on the market, which should keep the bounces small from the oversold shorter term charts. But if the trend has not changed (the big picture) from bullish to bearish then that daily chart might just reach the halfway point and turn back up too? I am still bearish but time is ticking for the bears to make their big move.

We need to see a nasty drop, like a wave 3 down of 100 points or so. The best clue here is to see what the oversold RSI (6hr) does today, as if we get a strong move back up today then the bears are in trouble as it would likely turn the daily chart up too, and that could lead to a multiday rally with a chance of another new high.

Again, that’s not my lean as I think we will go down, and down hard, but I have to point out the short term oversold conditions as in bullish trends they produce nasty squeezes. In bearish trends they produce small bounces only… until the daily gets oversold, and then a big squeeze happens. Bottomline here is that today is very important for the bears as they need a big down day to put a stamp on the high as being finished and in now.

Have a blessed day.