ES Weakness Challenging Ahead of Inflation Report

Good Thursday Morning, MPTraders!  May 30, 2024-- Pre-Market Update: Today is the second-to-last trading day in May, and as we speak, ES (-12.75 points from yest's close, now at 5271.25), with ES up 4.0% for the month. 

FWIW, from what I have been reading about the historical seasonal propensities, in any year when Jan, Feb, and Mar are positive and Apr is negative (the setup in 2024 so far), then May is positive AND June has been BETTER THAN May 100% OF THE TIME SINCE 1927! (Read that again). In other words, if SPX (ES) can hang tough in positive territory into tomorrow's close, then the historical seasonal tendency is for June to be up more strongly than May. 

From a purely technical perspective, my attached Big Picture chart shows that ES weakness during pre-open hours is challenging-- and in fact, briefly pierced beneath-- the sharply up-sloping 20 DMA, now at 5267. A close beneath the 20 DMA today will trigger a serious trend reversal warning signal that will put us on alert for tomorrow's close. If Friday's close is also beneath the 20 DMA (two consecutive closes below the 20 DMA), then ES will confirm a near-term downside reversal signal that will point next to a target zone of 5212-5216 (the convergence of the April up trendline with the 50 DMA)... 

Of course, tomorrow morning at this time we get the next very consequential inflation report in the form of PCE (Personal Consumption Expenditure) data for April. The reaction to the data has the potential to "make or break" the near term trend reversal signal AND the seasonal tendency heading into June... 

Bottom Line:  All eyes will be focused on the price structure and its proximity to the sharply up-sloping 20 DMA...