5 Green Months In A Row For SPX: New All Time High Next Week? April 1st Plan
Most days since November, I have started this newsletter off by discussing how ES is in what I call a “buy dips regime”. While I am a day trader, understanding the broad trend is critically important. If you get the trend right, a good chunk of your job is done for you. This dip buying has been programmatic: Every two red day dip this year has been bought, with two exceptions. One was March 13 to 15, where ES went three red. Bears were brutally punished for this, with ES putting in the largest green day of the year last week.
The other was this week, where ES put in three red days from Friday to Tuesday, where again, the dip was bought and ES put in a face ripping late day squeeze yesterday. As readers know, I have been long since late day Tuesday, buying this dip, and once again, classic technical analysis set it up, with ES forming a bull flag 5274-5299. I concluded my Tuesday newsletter with: “As long as 5266-74 zone can keep holding, ES can continue building out a bull flag structure between 5266 and 5299. This would involve working back up to 5288, then 5299”. Yesterday we held 5266-74 again, rallied to 5299 flag resistance, then broke out taking us into today.
I concluded yesterday by writing: “My general lean though never changes. It is always to defer to the trend. As long as 5299 holds, ES can test 5316, perhaps dip and build out more structure, then head to 5320+”. We got to 5320 exact by the close today. Can we start April with a new all time high? In today’s newsletter I’ll talk this, I’ll then do a deep dive into the absolutely textbook setup that originally got me long for this. I’ll then discuss the actionable trade plan for Monday.