Tonight’s podcast is longer as I update the situation and the EW count and the projected path for the markets.
Friday’s trade made very clear direction and the EW count moving forward. The ES along with the balance of the markets rejected any bullish scenarios after the release of the CPI number on Friday. The CPI again confirmed that inflation is increasing and now being recognized as it sweeps through the sectors of the economy.
On Friday, the ES tumbled from the opening making it an awesome trending day. The ES slid quickly through 4000,3975 and 3950 all before the U.S. markets opened for trading. Once open the ES continued to slide below 3950, 3925, 3900 before reaching session lows at 3895.
Sunday’s Globex started with a gap lower pushing below 3880, 3875, and 3860 reaching a low as of this writing at 3857.
I have adjusted the labeling on the Intermediate degree to be more in line with what I believe the market is actually doing. Under this labeling the ES has complete Intermediate waves A and B, (formerly labeled as Intermediate waves 1 and 2). Within the Intermediate wave C, the ES continues to have completed Minor wave 1 at the 3810 low, (basis the September contract), with Minor wave 2 now complete at the 4205. I am looking for 3810 to be broken as Minor wave 3 continues to unfold.
Fibonacci support for Minor wave 3 should come in at 3810, 3792, 3695, 3623, 3556, and then 3380. Resistance levels are likely to “tied” to the area(s) of the Moving averages. I am not expecting a larger correction to begin for a few days.