I've been surprised by the action overnight. I had a rough target of
1084.5 ES for today, with a fall on EURUSD to the 1.284 area by the end
of the day, and both targets were hit overnight more or less. ES bounced
there and EURUSD has bounced very hard there. It looks right now as
though we could well see a positive close today rather than the negative
close that I was expecting. If we see EURUSD break above 1.295 then
that is what I will be expecting today.

Tim Knight posted an IHS yesterday on EURUSD and that IHS is forming,
but wasn't yet fully formed, and it is that IHS that is likely to define
the next few days IMO. Here's my take on it:

This is part of a much larger picture on EURUSD. There is a rising
channel on it of course, that I have posted before and is still in play,
but the pattern I am really looking at on it is the big H&S
pattern forming indicating to the 1.214 area. Here's the bigger picture
on the 60min chart:

This is a remarkable pattern. Note how this current IHS is the mirror of
a previous IHS at the other side of the head that has the same neckline
and where the head bottomed at exactly the same place.

If it plays out this would be very bearish for equities of course, but
then many charts have been taking on an increasingly bearish look.
GBPUSD has tested the support trendline of the broadening ascending
wedge to the point where it now looks likely to break downwards soon,
though short term it should bounce with EURUSD:

Oil is breaking down from the rising channel I posted at the beginning
of last week, and while it may well bounce here, more downside looks
increasingly likely to me after that:

The picture isn't all bearish of course, copper still looks divergently
bullish and may well break up towards the recent high at 340:

My primary scenario for ES today is this. I'm expecting to close down
with ES and EURUSD weak all day while we make the RS on the EURUSD IHS. After
that I'm expecting a three or four day rally while that IHS plays out,
and before we start to decline again.

If we go down this road then I'm expecting that EURUSD won't decline
much past 1.28 today, and ES should hold 1075. My ES target for the
subsequent rally is in the 1110 – 1115 area. Here's the ES 60min charts
with what I see as the important support levels shown:

Looking at the overnight action though, I'm thinking that we could see
just the opposite, and if EURUSD breaks 1.295, then I'd expect to see
the IHS play out to target today, with ES making my rally target today
as well. I would then be expecting to see both fall from there over the
next few days.

Either way I'm expecting to see ES go higher than it did
yesterday over the next few days. Pussy Galore was saying at the start
of last week that a spike up or down that pulls back sharply often
precedes a bigger move in the same direction. That's right of course and
in EW terms that is a starting 1&2 or A&B wave pattern.
That is what we saw yesterday in my view and however it plays out I'm
expecting to see a higher high on ES than the one we saw yesterday in
the next three or four days.