8 Green Days In A Row For SPX. Did The Santa Rally Start Early? Dec 19 Plan
Last week was - incredibly - the 7th green week in a row for ES, something we have not seen since 2017 when ES went 11 green in a row. The last week of the rally was perhaps the most impressive of the stretch where FOMC last Wednesday kicked off a 95 point, one day squeeze, breaking out a 2 week megaphone to trigger longs. While the infamous “Santa Rally” doesn’t technically start until this Friday, ES got off to an early start today, putting in the 8th green day in a row.
As discussed on Friday, I was looking for ES to fill out a base then push higher to 4800+ begin this week, and I was long from Friday afternoon in preparation for it, holding it heading into the week, writing: “I am still holding a 25% runner” adding that “This means as long as 4756 keeps holding, my lean is we base out 4756-4786, then begin a push higher to 4808-10”. We got this today, and we started off this week by promptly returning to 4786 range resistance this morning, then pushing up into the 4800s.
We are now 8 green days in a row and we are nearing some significant overhead resistances. Are we likely to get a pre-Christmas dip before the Santa Rally? In today’s newsletter I’ll talk this, break down the setup that got me long on Friday afternoon in the 4760s for this 40+ point squeeze today, then talk the actionable trade plan for tomorrow.