1st Big Pullback For SPX In A Week, Where Does It End? October 28th Plan
This last week and a half has very much been a “technical analysis 101” period in SPX. In my newsletters on Sunday and Monday, I talked about ES was breaking out from a 4 week classic inverse head and shoulders base. My target all last week for the 1st leg of this breakout and 1st pullback zone has been 3870, and after 4 big green days in a row, we got there and have spent the last few days chopping before a strong earnings driven late day pullback today.
What do markets classically do after a big leg? I wrote yesterday: “We are due for some “mode 2” choppy trading” or pullback and this was 90% of today before earnings plunge after hours. After 4 green days in a row, I wrote yesterday ES had failed to put in 5 green days in a row at any point this year, and today was no different.
After a 250 point rally from last Friday, ES finally getting some needed correction late day today on earnings releases. Despite this though, the above mentioned breakout still very much in play. The question is now, where does the pullback end, and does this bear market rally leg still have legs? The last bear market rally in June lasted 7 weeks. In todays newsletter, I’ll be talking trading chop days like today (including how I traded today’s mess via yesterdays plan), must-hold spots for this pullback, and targets