Thursday’s trade was more interesting in that the ES did initially job higher on the PPI number.  The ensuing selling didn’t faze the U.S. opening where again we saw a slew of buyers push the ES to session highs at 4260.  Initially the market did break above the Daily 200 EMA at 4213 but quickly surrender the high as the selling took over and remained in place essentially for the balance of the session.  Session lows were reached 4202 almost 40 points off the morning high.  IMHO that was rejection.

As I have discussed previously, if the ES has reached the completion point for either of the current views, where view #1 would be the completion point for the Minor wave 2 countertrend rally.  Or view #2 where the ES completed Minor wave C and in turn an Intermediate wave A within the ongoing Primary B wave which started at the 3639 low.  I will continue to run these views parallel to each other until it does become clear, and that clarity will come from the market itself, as to the which of the 2 views is playing out.  First, though I am looking for the development of a 5 wave structure down on the hourly chart.

Again, under view #1 – a Minor wave 2 would appear complete with a Minor 3 wave down in its beginning stages.  Minor 3 would be expected/required to break below 3639.  View #2 – a Minor c wave and in turn an Intermediate A wave have completed at the 4260 high, with the ES now beginning an Intermediate B wave decline that would not be expected to break below 3639.

For tomorrow, it is expiration Friday – movement in either direction will contribute to acceleration as individual component stocks slide through strike prices.  The market may produce wider swings or may produce a stronger push lower or higher.  Resistance and support levels should hold consistent to where the hourly moving averages are sitting.