ES Morning Update May 30th 2024

The bears continues to put downward pressure on the market, but nothing too big yet. I get the feeling the market is waiting on the trial of President Trump, as if the demoncrats convict him and put him in jail we could see a mini-crash happen. I give it low odds but anything is possible.

I say that because the rally this year has been reported many times as the “Trump Rally”… meaning investors are buying in advance of an expect Trump victory this November. But if he’s put in jail for no crime investors will surely panic and that’s why I say we could see a flash crash happen.

Again, it’s low odds, but it would certainly get the bears super bearish… which would provide tons of fuel for short squeeze after short squeeze as the market rallies up to 6000+ in this fall. Now I’m NOT expecting this to happen, and of course no one would see it or be short, but it’s possible for sure. If it does then we know the target for the low will be the FP on the SPY. Now from a technical point of view we are getting close to oversold on the RSI of the 6hr chart, so a bounce back up should happen today or tomorrow.

The daily is just now rolling over and only about half way down now on its’ RSI, and the MACD is still overbought. So a lot of room is still left on the them into the coming weeks if the bears want to push it down into mid-late June.

So, assuming there’s no surprise mini-crash, we should bounce today or tomorrow and then rollover again next week. It should continue to have some bounces and lower lows until the end where I’d look for the flush out drop to last a few days, which ideally reaches the FP on the SPY. Again, I think this will be mid-late June, but that’s just a best guess. Don’t forget the common pattern of “turns” happening around the end of each month.

With today being the 30th and tomorrow the 31st, a “turn” back up for the bounce (which could last several days?) is near. This is what I see in the technicals and what should happen… as long as we don’t get any surprise from some news event.

Have a blessed day.