ES Morning Update September 18th 2018

Yesterday showed the first signs of weakness as Amazon dropped sharply and several other tech stocks. But the SPY held on strong the first half of the day fooling people into thinking it was a non-event. In the second half of the day the SPY finally succumbed to selling pressure and dropped fairly nice… at least it was more then what we’ve seen in a long time. Basically, it’s cracks in the walls… which I was hoping it would start after the long foretold upside FP was hit.

Now it’s make me wonder if they plan on pushing this turn date around September 18th out to another date unknown. I did not want to see the short term charts get this oversold before that FP was hit. And afterhours we can see that the SPY dropped even further before hitting a bottom and reversing back up this morning. I don’t like that at all… feels like a bear trap. I would have liked to see the SPY turn back up afterhours and be overbought at the open but that’s not the case. I get the feeling that move down was a wave 4 of some degree and the wave 5 up is about to start today.

If so then we could be in for another week or two of some wild swings both directions before a final squeeze up to the FP (around 2940 on the ES/SPX). Waking up the bears wasn’t part of my plan to see the FP hit today and then the big drop to start. Now that the bulls screwed this up the market makers will undoubtedly do the bull-bear shake-and-bake for a week or two so both sides get trapped on the wrong side before the FP is hit and then the big drop starts. It’s not a done deal here but my gut tells we are entering the Twilight Zone for bit and no moves in either direction will be real.

Today the bulls will see this move up afterhours and will suspect a new strong move up (like a wave 5) that they think will take out the current high. But if my gut is right the move up will stale and just trap bulls at a double top. Then bears will get on the southbound train and the next move down will stale out as well… probably just below the current low around 2883.50 (give or take a few points). From a wave count that could be labeled a C wave down if yesterday was the A down and today puts in the B up (all of the suspected wave 4 up of course).

Naturally wave C’s are usually much bigger then A wave so bears will be expecting a breakdown of the low yesterday afterhours (around 288.20 SPY). So what if it falls short of that prior low on the ES/SPX (and/or SPY), and then rips back up again? I wish I had the exact road map as to how this is all going to play out but I don’t unfortunately. So I just have to guess and stay in cash until the upside FP is hit. I’ve been here before in the past where the market makers take it close to a FP level and then back away for awhile. It’s like they know more and more sheep are figuring out the FP’s are real future targets so they can’t just go straight to one but instead have to get those with itchy fingers to take a position early thinking the FP wasn’t real or that it was “close enough” to being hit so they jumped in early.

Every time I did that in the past the market makers would go in my direction for a bit and then reverse and go hit the FP which screwed me (and everyone that went early) on my position. With time decay on options and the actual price going against I’d always have to bail for a loss. Then the FP hits and I don’t take it because I already got shaken out and angry. Lesson learned here is that the market makers are really good at their jobs… which is ALWAYS to screw the sheep.

Anyway, my turn date for today seems unlikely now for the top being put in. It could happen but at this point they might have a secondary date planned. I know it’s close as we have the Legatus Pilgrimage scheduled for this October 5th-12th and many times in the past big turns happen around them. It’s where “they” go (Rome… the Vatican Bank) to launder their stolen money. Meaning that while I’m expecting this to drag out into that meeting it is possible that we drag out for another week or so to hit the FP and start the first wave down in front of the meeting and then the wave back up to top during the meeting, leaving the 3rd wave (the big drop) to happen right afterwards. Anyway… I’m still waiting.