4 Green Days In A Row For SPX; Will We Get 5? March 22nd Plan
My newsletter yesterday was entitled: “Massive Two Week Pattern Breakout For SPX; How Far Can It Run?”. The pattern breakout I am referring to here should come as no surprise for readers. It was a two week long, bullish triangle, and I affirmed this Tuesday by writing: “My general lean though is always to defer to the trend. We are forming a triangle with 5184 support and 5246-50 resistance. As long as bulls can defend supports on any FOMC dips, my lean is it breaks out to 5258, 5276-80, 5295-5300+”
The breakout commenced a new 70 point leg up, releasing two weeks of energy price had accumulated in the base and this once again demonstrates the power of age-old, simple chart patterns. There is an endless amount of noise in markets - macro analysis, thousands and thousands of commentators and opinions, endless headlines. Price cuts through it all, and simple patterns give one a directional lean and most importantly, an entry trigger. In yesterdays case, 5252 was the trigger, and I wrote Tuesday: “I’d be watching for acceptance of the 5246-50, then a breakout may be playable 5252”, and from there, a 70 point melt-up began.
This breakout continued into today, continuing up to 5315 next target given yesterday, before spending much of the day basing out and resting. As mentioned in the title, we are now 4 green days in a row, for the first time in over a month, having not gone 5 yet this year. Can we keep going? In today’s newsletter, I’ll talk this, I’ll go over the setup that lead to yesterdays/today’s squeeze (its the rarest of my three setup types, but has the highest R/R), and then I’ll discuss the actionable trade plan for tomorrow.