Teetering On Bear Market: Weekend Wrap Up
Day two of *extreme* selling for ES and today was about as close to a bid-less market as one can practically have. In fact, the last 13 hourly candles were all red which is an extremely rare occurrence. Today was also a 2.81% red day which makes it the second reddest day this year, with the only slightly worse being March 7th.
In yesterdays newsletter I wrote: “Below 4340 is: 4324, 4285, 4250-60. I think if we lose 4340, we probably just dump 100 points but 4250-60 then bounce there”. This certainly played out, and more rapidly than I thought, with only very mild reactions on the way down.
The problem now is ES is near some very critical supports - generally back into the 4250 zone that has been the “floor” since July 2021. A failure in this broad zone quite likely would start a proper bear market, and one that has been a long time coming. I do think a bounce comes 1st though. Here’s what I think happens