2023 Closes With A Red Day For SPX. Will Bears Get More Next Week? Jan 2nd Plan
Today’s session concludes 2023 and ES saw a very rare dip today - the first since last Wednesday. The run up into the end of this year has been nothing short of staggering and in many senses, historic. Not only have we put in 9 green weeks in a row, but since December 7th, 14 out of 16 days have been green, including four in a row prior to yesterday as we remain inside the seasonally strong “Santa Rally” window which lasts another two days still.
The two red days we have had in this last 16 day stretch was last Wednesday, where ES lost 4810 multi-day support and saw a rapid, half day flush to 4745. This was bought up which saw a 100 point rally. The second was today’s, where ES lost 4828 support this morning after 6 tests, leading to a 35 point, similar half day flush. Just like last Wednesday though, the dip was quickly bought up. I wrote in my last newsletter: “If we get a very deep flush tomorrow I’d consider a final bid at 4808-04…. One could scale the zone or wait for 04 to clip then reclaim 08 to get long”. While this took some slight drawdown, it lead to a good 20 point afternoon rally.
Will this dip produce another 100 point rally like last weeks, or fizzle? In today’s newsletter I’ll discuss this, I will then do a very deep dive into the variety of failed breakdowns we have had in the last week. This is my core setup - and essential to know. I’ll then discuss the plan for Tuesday.