ES Morning Update December 24th 2024

Should be a light volume day with a move up from the looks of the charts now. We are probably starting a wave 3 up (extra tiny) that will reach big resistance in the 6100-6120 zone on the ES. Since this week is expected to have most traders taking off for the Christmas holiday the expected pullback from that 6100-6120 zone might not be very much. I did a post yesterday on Twitter with that chart, which I’m re-posting below.

Notice how the pullback after hitting the 6100-6120 zone (to complete Extra Tiny Wave 3) is drawn out in time until the end of this year, and it’s not that deep either. I still think this will be the path going forward, which will be the Extra Tiny Wave 4, and it will setup the first week of January for Extra Tiny Wave 5 up, which will complete Tiny Wave 1, which will then be followed by a shallow pullback.

Now, if the “degrees” of the waves are correct the pullback should not take out the low last week, but if I’m wrong on the wave degrees, meaning they are a larger degree waves, then the move up to a new high would be Tiny Wave 5 inside Small Wave 5, inside Medium Wave 3, which will setup Medium Wave 4 down to play out sooner then expected.

I posted on Mondays update a chart similar to the one above and I had them labeled as 5 Extra Tiny Waves up (for a double top) to complete Tiny Wave 1 up, which I’m re-posting it below again.  It’s just extended in time with subdividing Extra Tiny Waves before it completes Medium Wave 3 up.

That WILL be wrong if we take out the current high into the first week of January. It will be higher degree waves. Meaning the 5 waves up will be Tiny Waves which will complete Small Wave 5 inside Medium Wave 3, and that will set the market up for a deeper drop in January as a Medium Wave 4 down is of course a larger degree wave then Tiny Wave 2 would be.

With the Tiny Wave 2 scenario we would drag out the rally into mid-late January to reach a higher high, but if we push through in a fast squeeze for that new all time high in the first week of January, then those Extra Tiny Waves won’t exist and will be Tiny Waves instead.

You see, I don’t know if the market is planning on subdividing into a bunch of Extra Tiny Waves to make Tiny Waves or not? The “tell-tale” will be how high we go into the first week of January. If we do a big squeeze to say 6250+ then we are NOT subdividing and that rally will complete Small Wave 5, inside Medium Wave 3 and will setup the market for a nice correction the rest of January.

If we meander around and fail to make a new higher high in the first week then we will probably subdivide and it will take until mid-late January to complete Small Wave 5 inside Medium Wave 3. Lots of options that could happen into the first few days of 2025. I will remain very open to either scenario playing out and will react accordingly.

Merry Christmas