50 Points From All Time Highs, Can SPX Get There? June 5 Plan
If there was one phrase to describe the month of May that just concluded it would be “buy all dips mode” and this aptly characterized all the action in May until mid-last week, when we lost 5302 (this level will sound very familiar) support and began a multi-day pullback before buy the dip returned in force last Friday afternoon with a 100+ point squeeze in the afternoon session. So far, this description works for June as well, with ES only 50 points from all time highs and all June dips bought.
Where did that Friday squeeze take us? I wrote on Friday at the close: “We are currently sitting right at resistance of a week long bull flag/channel at 5305. This is an absolutely massive resistance”, and I wrote again yesterday at the close: “We are sitting again at major flag resistance right now ~5302”. Friday, yesterday, and today, we tested this zone (often exactly) and put in 60, 40, and 30 point dips respectively. This level is no coincidence, being resistance of a large, week long flag pattern shown below with 5302 res and 5213 support. I concluded yesterday by writing: “My lean is always to defer to the trend. Ideally, can fill out this structure more (and defend those pivots mentioned above) which would then target 5311, 5317, 5335-42.”. Today, we did just that, rallying to ~5302 this morning, and dipping once more to fill out the structure, then returning to 5302 again by the close.
We have now, for three sessions in a row, close the day at the same price ~5302. Can ES make the dash to ATHs? In today’s newsletter I’ll talk this, I’ll give some very clear examples of my secondary and most straightforward setup type (the backtest), and I’ll discuss the actionable trade plan for tomorrow.