6 of the Last 7 Days Red For SPX; Is More Red Incoming? October 26th Plan
Yesterday, ES did something unusual - it put in a green day. To be specific, this was the first green day after a very rare 5 red days in a row. This was the longest consecutive streak of red days so far in 2023. Yesterdays green day was part of a broader relief rally that began at the Sunday futures open and ran about 77 points.
Today, bulls were unable to sustain it. All week - after setting a low on Sunday - ES had been base building between 4245 and 4275 or so and I wrote yesterday: “I consider the 4247 to 4275 zone to be a pure chop area still” and overnight last night we sold back down to 4247 support for what would be the 6th test in 2 days. Bulls couldn’t hold it - I wrote yesterday: “Bear case tomorrow: 4245 needs to fail” and we lost it this morning, which triggered a bearish start to the session and selling that lasted most of the day.
We are now an incredible 6 of the last 7 days red for ES, having made a fresh low. The RSI however, is quite oversold again. Is another short squeeze like early this week setting up? In today’s newsletter I’ll talk this, go over the setup that triggered todays short on the 4245 fail, then provide the actionable trade plan for tomorrow.