8 Green Days In A Row For SPX: The 1st Time Since Nov 2023. Can Bulls Manage 9? Aug 20 Plan
We headed into this week with an extreme set of conditions: 7 green days in a row, something we have not seen since November 2023, when the most recent macro leg of the bull market began (following last years August-November 12% correction). Extremes tend to beget extremes, and this run was followed a mere week ago by the biggest three day crash since the March 2020 Covid rout.
It should come as no surprise where this 7 green day stretch took us. As readers know - and as was documented extensively day to day with setups provided in advance - I was long all last week looking for a rally to 5585. This level was no coincidence: It was resistance from mid-June to July 3rd, and we set the August highs just a little above there and sold 480 points. I wrote back on Thursday: The ultra bull casefor tomorrow [ES] will just base out below 5572 and above 5550 then from there, tackle 5585 next up”. We tagged this on Friday, then spent last night and this morning basing out around there, setting up the next leg higher, which commenced this morning. I wrote in my Friday newsletter at 4pm: “My general lean though has to be to defer to the trend until it loses a support. This means that as long as 5543-46 keeps hold, we can pop up to 5595, 5604, then 5629”. We got right to work on this today, pushing to 5595, 5604, then clipped 5629 exactly into the close.
We followed up that 7 green days in a row, with an 8th today. Can ES really do 9? In todays newsletter I’ll talk this, I’ll do a deep dive into how I think about intraday trend changes (this thought process is what kept me long all last week, with no attempts short as readers know). Finally, I’ll discuss the actionable trade plan for tomorrow.