The S&P 500 (/ES) continued to drop lower on Thursday. The /ES opened below the weekly Ichimoku Cloud for the first time since COVID in 2020.
Although the market is extended to the downside, this doesn’t mean price will head toward liquidity. Instead, we want to focus on the next pop setting up for a better short opportunity.
Pay close attention to the $3,900 range. If the /ES breaks through this range to $4,000, we could see it head toward $4,029 and $4,055. If the /ES fails at $3900, it could roll over to $3,840 and $3,800 next.
In the video above, we’ll lay out key zones on the major indices, the volatility index (VIX), and names on our watchlist like SHOP, GOOGL, and AAPL. We’ll use these inflection points as our compass heading into Friday.