Pressure Is Down - Market Analysis for Nov 28th, 2022

With the market moving to the downside last night and today, we have now developed a 1-2, i-ii downside structure on the ES chart, which the market now seems to be following as I write this.  And, for those of you following through the day, you would know that we have been tracking it as it was developing.

I can keep this update very simple.  Ideally, the market should now be heading to AT LEAST the 3960ES region, with the 3945/50ES region being a much better target for wave iii of 3.  Once we get to the 3960ES region, then our pivot becomes our resistance.  And, if we are indeed heading down to the 3900 region, then we should not move back through the pivot from that point in time.

Alternatively, should the market break this set up at any point in time, then it opens the door again for another run higher in the blue [a] wave.   In fact, with this pullback, the market has now reset the technicals on the smaller degree to allow for a rally to 4118-4154SPX if we are unable to follow through to the downside.

The other point I want to make in this evening’s update is that the current downside is only projected to take us to the 3900 region – unless, of course, we see strong downside extensions.  That means that a standard decline here would provide us with an a-b-c flat, which will not reach the ideal target in the 3830SPX region – again, barring any larger downside extensions.  

So, if we do head down to complete this c-wave, then we will have to watch very carefully how the market reacts once it is completed.  If it should rally in impulsive fashion, then we may have completed all of the [b]/[2].  However, I do not suspect that is likely since the MACD on the daily chart still needs much more of a reset.  Therefore, if we do drop down towards the 3830-3900 region in the next day or two, then I suspect it is only the [a] wave of a larger [a][b][c] structure.