4 Red Days In A Row For SPX - 1st Time Since May. Relief Bounce Time? August 7th Plan
NOTE: This is a re-send of the newsletter for Monday August 7th, originally sent out on Friday, for those who did not receive.
August certainly started off with a bang in ES. As readers recall, the month is seasonally bearish to start (bullish to finish) and ES put in its first red week in exactly one month. Notably, it also put in a rare three days in a row before today. Since the March low, this was exceeded only once, with 4 red days in a row starting May 1st (which then set a bottom for a 530 point rally).
Yesterday, I was looking for a relief bounce. The target for this was 4550, and I wrote yesterday that my lean for today was: “that ES can keep defending that 4517-24 cluster, 4508 absolute lowest. From there, we can push back to 4550-53, then sell again perhaps another full leg lower”. This is exactly what played out, and after a few morning dips that held those supports, ES squeezed to 4550 this morning, overshot to 4560, then got that full leg lower.
Today, ES put in its 4th red day in a row. Will it bounce like last time? In today’s newsletter, I’ll be addressing this, breaking down the textbook setup that started today’s squeeze then sell, then providing the actionable trade plan for Monday.