ES Morning Update February 9th 2024

A totally nothing day yesterday. Absolutely perfect I think as it’s a sweet lullaby that puts all the bears to sleep right before the market tops and rolls over for a nice pullback over the next several weeks. As for today, we could repeat yesterday… but I lean toward a small red close.

The breakout to the upside should be early next week, and the day I favor as the blow off top is Tuesday the 13th (CPI number could cause it?). The market will make it tricky, so while I’m thinking we breakout and run to that 5050-5100 zone on the ES it could fool me (again) and just barely go higher instead. I mean, we could dip today and go back up to the same spot on Tuesday to barely make a higher high. Then do a slow decline the rest of the week so that no bears spot that the top is in and that the pullback is starting. The ol’ wave 1 down, 2 up, 1 down, 2 up, etc… and then drop in the wave 3 the following week.

The pullback should not alert the bears until it’s almost done. It happens over and over, the bears wake up near the bottom and then short ever move higher and keep getting squeezed over and over and over until they finally give up. We are close to that point now, which means the top for this rally is near too.

Add in the Seasonality and you have very good odds that next week ends this multi-month rally and allows a 7%-10% pullback. I remain patiently waiting until next week for the short. If by some fluke we rally 50-100 points today and close at the highs I’ll look for that to be it, instead of next Tuesday. Predicting the exact day is tough, but it’s super close and I’ll be ready to short it.

Have a great weekend.