A Rare 4 Red Days In A Row For SPX, What Next? December 7th Plan
Today was the 4th red day in a row for ES and since the October 13th bottom was set and this current rally leg began, this has been quite rare. The only other time during this rally phase that ES put in 4 straight red was the Oct 31st to Nov 3rd period (in that instance, we began a 400 point rally the next day).
As discussed in my last newsletter, yesterday ES lost a critical support level at 4040-4050. This was not only the initial two November highs (which broke out after Powell’s comments last week) but it was even more importantly, the 200 day MA. As a result of this failure, I discussed yesterdays how I was getting short from 4035 with a 3960 ultimate target, and we clipped 3960 today.
As readers know though, 3960 was a very important uptrend support for ES, and it failed today. FOMC and CPI next week are the real catalysts with most of this weeks action essentially being noise, but this nonetheless not a good development for bulls. In today’s newsletter, I’ll discuss what it means, how I traded today’s action via yesterdays plan, and the actionable trade plan for tomorrow.