5 Green Weeks In A Row For SPX. Can It Really Manage 6? Feb 12 Plan
Another green week has capped off for ES, making this the 5th green week in a row. While this may seem shocking, it is not for technical analysts or readers of this newsletter, and as I have discussed every single day now for three weeks the “cause” of this strength was on Jan 19th, we broke out a perfect, month long bullish inverse H&S, triggering longs and “buy every dip” mode. Charting 101: Month long breakouts, see month long rallies.
Since then, we have only had 3 red days of the last 15, and today saw the most recent spike to new highs. As readers know, I was long from 5009 yesterday in preparation for this, writing yesterday: “I am holding my 10% long runner still from 5009 risk free now and will just hold onto this”. The reason I was long, was because “We are currently forming another quite clean bull flag and have been since yesterday around noon”. This resulted in another leg up, taking us to ~5050 today.
Are we gunning for 6 green in a row, and where is the ultimate target? In today's newsletter I'll talk this, I'll then do a deep dive into the sequence that produced this latest leg up (hint: both my primary and secondary setup drove it), finally I'll discuss the actionable trade plan for Monday.