A Rare 8 Green Days In A Row For SPX. Is That It? June 19/20 Plan
NOTE: This is a resend of the newsletter sent yesterday at 4pm. It encompasses both today (holiday) and tomorrow (regular session)
Yesterday, ES saw an explosive move higher, and its cause was absolutely no shock or surprise to technical analysts or those reading this newsletter, but was likely quite shocking for those trading based on macro or any other variable that has no utility for timing price. Yesterdays squeeze had twofold cause. Firstly, ES hit my macro target of 5511, which had been my target for many weeks as written here every single day. This was resistance of a textbook 3 month long “megaphone pattern”.
After hitting this resistance last Wednesday after CPI, we spent the following 3 sessions until yesterday building out a new chart pattern, consolidating sideways, which I described on Monday as being a “picture perfect bull flag”. I wrote in the newsletter sent out Friday 4pm: “My general lean is always to defer to the trend. 5457-5513=the new flag. We could certainly fill it out more, but as long as supports continue holding, we can break higher to 5518, 5534+”. From here, we melted up yesterday 50+ points and this move was therefore caused by a 3 month megaphone breakout *combined* with a 3 day bull flag breakout.
After this move, we spent today resting and basing out, and ES has now put in an incredible 7 green days in a row. How much further can we go, and when will I short? In today’s newsletter, I’ll talk this, I’ll discuss how two highly repetitive aspects of my system combined yesterday to produce this leg up (the failed breakdown + the bull flag). Finally, I’ll discuss the actionable trade plan for tomorrow.