2-23-22 Morning Update

Feb 23

ES hit the weekend update target 4250 before the market opened yesterday and SPX hit its 4262 downside target, near exact on both.
However, the pattern now looks different. It appears to be moving in waves of 3, suggesting we have an ending diagonal with a bounce (in progress) and another low to come. This is one crazy market to analyze, and I need more data to narrow down the possibilities.

If the bounce at the end of the day is all we are getting, 4200 is likely next. Preference is to see it higher, possibly to the trendline and 50% of the entire structure, which is 4430-4440 in SPX cash ( a little lower for ES). Wave measurements point to 4396 first. I won’t have a downside target until we see where it turns, unless it has already.

If the 3/3/5 flat pattern is going to remain active, the current low would need to hold & it would need to head up to 4600 from here. I see that as a much slimmer possibility (even though downside target was hit) mainly due to wave structure and the fact that Nasdaq has broken the January low.

Currencies are a sideways mess in both direction. If/When EUR/USD reaches 1.12638 and turns, it may suggest it is in a very sloppy second wave, with the market about to turn to the upside and dollar weakness to coincide. That is unlikely to occur within the next 2 days, and if it does get down there that quickly, it will likely break lower.

After realizing my SPY 430 put position expires today, I closed it near the open yesterday for a $1.30 profit (posted to channel). Would have had more if I closed it last week, even at higher levels, but kept it in case we got a capitulation move down today.

If it can get up high enough (4396 or 4440) there should be a decent downside trade for at least 200 points. When it turns (or is close) AUD/JPY, AUD/USD and EUR/USD should be close to turn points as well. I doubt it is going to 4600 from here, but we’ll watch. If so, it will be a better short.

I’m leaving in a few hours to head back to CA and won’t be able to watch the market today.