ES daily 03/07: bulls are losing this battle, for now
For weeks, I have been expecting market rally toward FED meeting, however, by losing almost 3% today and close at dead low, I think bulls are losing this battle for now. We will have CPI report this Thursday morning and Fed meeting next Wednesday, both add to the uncertainty to the market until it's done, which make it very unlikely for market to go for the 150~200 points rally needed to confirm the bottom. So my primary view now would be that market will be doing choppy decline into Fed meeting or at least into this Friday/next Monday. And the previous count will probably need to be redrawn completely, where the 4101 low marked on the previous counts is probably just wave (3) of (C). The target of the new (5) of (C) would be minimally revisit of 4100 and quite possibly to 4000 range.
The fear of oil embargo against Russia is the main reason for today's drop and CL's rally. While I don't think a complete embargo by all western countries is possible now, an embargo by just US/UK is totally possible or even probable by now, I assume it would be announced soon and that could probably be the next by the news event to give us some sort of wave 4, before a final push down toward the real bottom.
This recount would become likely if we have a sustained break of the last bullish support range of 4165~4175, and bulls can still save it by holding that range and doing a big rally tomorrow. But no matter what, we should be doing the same thing as we were approaching 4100 low again, watch for a 150~200 pts rally within a few hours, whenever that happens, it's the clear sign that market is bottoming, and we would finish this pullback that lasts 2 month already and aim for new ATH. I am temporarily short right now with hedge calls, but I expect this drop would completely finish within this week or next. Or in the worst case that Fed unexpectedly giving even more hawkish move, it should be done by end of March.
The fear of oil embargo against Russia is the main reason for today's drop and CL's rally. While I don't think a complete embargo by all western countries is possible now, an embargo by just US/UK is totally possible or even probable by now, I assume it would be announced soon and that could probably be the next by the news event to give us some sort of wave 4, before a final push down toward the real bottom.
This recount would become likely if we have a sustained break of the last bullish support range of 4165~4175, and bulls can still save it by holding that range and doing a big rally tomorrow. But no matter what, we should be doing the same thing as we were approaching 4100 low again, watch for a 150~200 pts rally within a few hours, whenever that happens, it's the clear sign that market is bottoming, and we would finish this pullback that lasts 2 month already and aim for new ATH. I am temporarily short right now with hedge calls, but I expect this drop would completely finish within this week or next. Or in the worst case that Fed unexpectedly giving even more hawkish move, it should be done by end of March.