: Big flush down this morning into the early afternoon before the market staged a sharp oversold bounce. Overnight the futures began selling off after 2 am and were already down sharply before the GDP numbers were released. As you know, the GDP numbers came in hotter than expected, and normally that would be a good thing but NOPE, the market is so fixated on when the FED can eventually stop its interest rate hikes and the hotter than expected GDP was taken as a sign that the FED still has a long way to go. The market indexed closed down sharply with the SPX losing -1.5% and the QQQ Nasdaq losing -2.5%, however this was well off the intra day lows.
The market has played out almost perfectly how we have been laying it out. I've been discussing the open gap on the SPX at 3770 as a target and that was finally filled today! Also, I've been discussing that the market needed a 5th wave move down to complete this initial downtrend before some sort of ABC rally can begin - and today's lows appear to be that 5th wave low. Overall, I'm expecting the next rally to form a lower high and play out in a 3 wave structure.
ES Levels (March Contract)
Upside: 3873, 3895, 3913, 3930, 3952, 3970, 3985, 3997, 4015
Downside: 3847, 3822, 3815, 3800, 3872, 3760, 3745, 3727
Trading View ES Chart Link