Today was a deep red day for ES and in fact, the biggest red day this corrective phase began on March 29th and ultimately the largest since March 7th. Zooming out, we are in retracing mode having not quite retraced 50% of the late March/early April rally yet.
To start this week, my core “forecast” was that we sell off into this 50dma cluster to start, and this played out nicely today, I wrote yesterday: “If we lose 4460 (hit it then don’t spike out immediately) I will be looking at the short down to 4421-4415 where I’d cover and try to play a bounce”. Market opened today below 4460 and it was a fairly straight move down to target after.
Here’s where it gets interesting: We are now at the 50dma (actually, have lost it technically) and we have a major, major catalyst tomorrow with the CPI release at 830AM. Expect a trappy, high volatility day. Here’s what I’m looking for out of this critical zone - tomorrow could determine the next significant trend