Recap Most messed up index among the big 3. Held a higher low right from the start of the week and zoomed higher. Then news shock help ES gapped through the Y-0 resistance and forced an all out short squeeze to above Y+1. Then after a 3rd push new high above Y+1, ES turned around and sold off all the way back down to almost Monday low. Closed the week above Y-1 and near week low.
Outlook Very unusual option expiration week. The effort to support the market from falling further by the very last hour was clearly seen. So in the beginning of next week we will likely see the unwinding of this supporting inventories early in the week so upside is very limited. I don’t think the resistance zone B-0 would be tagged.
A drop to B-2 with very wild swings over the coming 2 weeks will stage a great bottom to go long for a run til end of this year.
The keyword here is patience. Until ES showing a proper bottom with confirmed buy (i.e. breaking the down trend) there is no reason to pick the low.
S&P 500 Oct 22 to Oct 26 Outlook
Lawrence’s Comment
Most messed up index among the big 3. Held a higher low right from the start of the week and zoomed higher. Then news shock help ES gapped through the Y-0 resistance and forced an all out short squeeze to above Y+1. Then after a 3rd push new high above Y+1, ES turned around and sold off all the way back down to almost Monday low. Closed the week above Y-1 and near week low.
Outlook
Very unusual option expiration week. The effort to support the market from falling further by the very last hour was clearly seen. So in the beginning of next week we will likely see the unwinding of this supporting inventories early in the week so upside is very limited. I don’t think the resistance zone B-0 would be tagged.
A drop to B-2 with very wild swings over the coming 2 weeks will stage a great bottom to go long for a run til end of this year.
The keyword here is patience. Until ES showing a proper bottom with confirmed buy (i.e. breaking the down trend) there is no reason to pick the low.
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