Friday’s trade has something for everyone with strong downside and strong upside moves taking place within the first hour of trade. The ES dipped to 4062 just after the opening and then proceeded to ignite higher reaching the session high at 4152 within the next hour. It was great trading and very profitable! It was also relentless in both directions, very fast in both directions, and very disjointed. But not impossible.
Moving forward and for Monday – the wave pattern off of the 4062 low suggests a smaller wave 2 bounce may still be in force. If this is the case what’s left to accomplish is another rally back to 4155 and once reached expectations would be for the “trap door” to drop open as prices drop. A crash scenario cannot be ruled out, but I think at this point the action word, “crash” is subjective. Expectations should the ES reach 4155 to 4167 would be for the market to reject the levels and decline with acceleration.
Support levels on a break below 4062 come in at 4055, 4015, 3948, 3898, 3851, and then 3728. Resistance should be found at the 8, 20, and 50 MA’s with Fibonacci resistance at 4167.