Quick update: Markets gapped up over the weekend in a 3rd wave following an a-b-c zig zag last Friday.
Instead, it dropped further than I expected — towards 2430 ES – making it look more bearish — yea the markets were able to bottom – so it seems the market will be headed to new highs once again.
If so, the recent drop was a C-wave – but only lasted a day and a half or so.
With the over the weekend rally and a massive drop in VIX – it is now unlikely that the bearish potential will unfold in the next few days.
Instead, I’m seeing a move to new highs as higher probability at this point because the S&P not only gapped up but held high for the whole day – without any significant retrace. The bearish potential should have at least seen a dip below 2450 – but that didn’t happen.
So bulls remain in control in the immediate term.
The previous hourly chart had 2452 and 2441 ES as resistance zones – both of which were cleared over the weekend gap up.
So the bearish potential in the market is no longer there with high probability.
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