$SPX #ES #S&P500 #Macro #Weekedn #Weekend
We continue to follow two different macro path, the blue bullish and the red bearish ones:
On July 23rd I shared this weekly chart:
On Aug 18th I predicted a turn up off the Green Demand zone:
On Aug 30 I updated those two paths:
This is how that chart and those two paths look like now:
Since late July 2023 both paths could move in unison and could stay feasible. But now we came to the point where time comes for one of those paths to get invalidated.
(1) The Bearish scenario:
Let’s now switch to a 240 min chart of ES-mini futures:
Note the red macro Supply Zone 4,543 – 4,517. That is the key Maginot line dividing the bear and the bull markets. Last Friday bulls attacked the Red Supply zone but got rejected. The Bearish path allows bulls to make another leg up and even test the upper edge of the Red Supply zone ( 4,543).
Break over 4,560 would most likely mean that bears failed to defend that defense line. In other words the bearish Head and Shoulders reversal pattern will get invalidated. Last week I explained that 50% of all Head and Shoulders patterns get invalidated. Price can turn up half way down the neckline (4,415), can go over the top of the red shoulder, invalidate the bearish reversal pattern and make bears chase a new rally.
If you look at a Daily chart of ES-mini you will see why we are at the major crossroad:
Last week the 50 Daily MAs stopped decline on Wed, Thu and Fri.
Break under 4,489, the lower green 50 DMA calculated on lows will most likely be followed by a quick drop down to 4,415. On the other hand, two EMA 20 provide overhead resistance at 4,523 and 4,550.
You can see above a path for the black -a- up, -b- down, -c- up corrective zig zag that can play in between of the Green DMA 50 and the Blue EMA 20 Daily moving averages:
A legendary trader and stock market forecaster Gann used a notion called “the panic window”. He considered a panic window a period of price decline acceleration that starts 45 days since the last market peak:
Nasdaq topped on July 19. Note July 19 +45 days = September 2. This is exactly when this move down started!
S&P topped on July 27. Therefore the panic window for S&P starts on September 10th.