$ES $SPX #failed breakout
Check out a repeating bearish pattern of September on teh SPX chart below:
S&P Daily chart in comparison to the past years 2017 – 2024
You can see that in the majority of recent years S&P rolled over at the very beginning of September.
Now let me remind you a bearish wave count of S&P 500 cash index:
S&P 500 Daily chart
My rule, developed through years of experience, states that a corrective wave B up can extend as far as the –123.6% to –138.2% extension of the preceding wave A down.
In the current chart, the S&P has already reached that target zone. The upper boundary of the red box represents the strongest –138.2% negative extension of the preceding decline.
So, even under the bearish scenario, this grinding move upward could still extend as high as 6,640 on the S&P cash index (not the E-mini).
Under that count, I would then anticipate a sharp reversal into the green demand zone, with the milestone level at 5,786.95 expected to act as strong support and potentially absorb that decline.
Glen Neely offered an important observation: a corrective wave B up often consumes two, three, or even four times the duration of the preceding wave A down. In this case, the current corrective wave B has already taken about three times longer than the prior decline. That allows us to consider this slow grinding move up off the April’25 low as a short setup.
Now let’s look at a 240 min chart of ES-mini:
ES-mini 240 min chart
Looking at the ES-mini futures chart, the count can be made in a very similar way. I really do not like that slow, grinding move, which never manages to gain speed. The entire advance off the late-May 2025 low has a corrective -A-B-C- up structure of a giant wave (B) up—a rally marked by higher highs, yet continually interrupted by unusually deep pullbacks.
These considerations make me doubt if ES will trigger the accelrated rally scenario we have discussed:
ES-mini 15 min chart
There is a key breakout resistance line at 6,508.75.
- In the very bullish scenario, a breakout above this level could trigger a short-covering rally.
- However, under the bearish scenario (discussed above), one more push higher—at least a marginal new high above 6,509—would likely complete the entire corrective A–B–C upward structure of wave (B) off the April 2025 low.
For bears, the ideal setup is the classic failed breakout: a push up toward 6,620, followed by a sharp reversal back below 6,508, and then a swift drop into 6,460, which represents both micro support 2 and the breakdown level.
For bulls, the rules of engagement are clear and simple: push the ES above 6,508.75 and hold it there—not allowing price to slip back beneath that threshold.
The Friday August 29 PCE release is a make-or-break data point that could validate or upend both bullish and bearish wave counts. It provides the fundamental spark markets are waiting for, right as they sit at critical technical levels.
This particular Aug 29 release of PCE is crucial because:
- It comes just days before the September FOMC meeting, making it one of the last key data points before policy decisions.
- The S&P and Nasdaq are already at technical inflection zones ( with resistance around 6,508–6,620). A surprise in either direction could easily be the catalyst that tips the market into a breakout or breakdown.
- Liquidity is thinner ahead of the Labor Day weekend, which can amplify price moves when data surprises hit.