Good Thursday Morning, MPTraders! September 21, 2023-- Pre-Market Update: The fallout from the Fed's "higher-for-longer" mantra finally arrives, and comes right in time for the seasonally treacherous September-October timeframe from roughly 9/20 to 10/10 (see the seasonal chart below), as ES and NQ bear down on consequential support plateaus, as 10-year YIELD climbs to 16-year new highs at 4.47%, with Oil continuing to circle $90/bbl, and Congress marching toward a Government shutdown! A perfect storm of negativity.
Wall Street might find itself hoping for a few really miserable data points in the days ahead, starting with this AM's Unemployment Claims data at 8:30 AM ET! Bring on a recession already!
My Big Picture ES Chart shows yesterday's plunge from 4500 to this AM's low at 4410.75 is probing key June-September support lodged from 4420 to 4400, which if violated and sustained, will trigger downside potential derived from the Head & Shoulders Top formation outlined in Red. A sustained breach of 4400 will point initially toward a challenge of the up-sloping 200 DMA, now pushing up to 4300, where the Bulls and Bears will wage a major battle. If the Bulls lose, they will regroup to defend 4100 thereafter.
A press to 4300 will represent a 10% correction from the July 2023 recovery rally peak, while a decline to 4100 will amount to a 12.5% "haircut" from the July high.
As for NQ, my 4-Hour Chart shows the price structure bearing down on its key June-September support plateau in and around 14,800, which if violated and sustained, will trigger downside projections into the 14,400 initial target zone, and if violated, will point next to 13,500.
For today's session, in the event that both ES and NQ either manage to hold their respective critical support zones or marginally break them prior to launching a recovery rally, any strength needs to 1) recover and sustain above 4440 in ES and above 15,122 in NQ and 2) must exhibit bullish form for my work to indicate that the "Necklines" of their respective top patterns have withstood the first onslaught from the bears... Last in ES is 4410.50... Last in NQ is 14,981.75