A Rare Green Day For SPX; Dead Cat Bounce or Bottom? Sept 29th Plan
The action since yesterday was further evidence of just how powerful simple technical analysis can be. I concluded my newsletter yesterday by writing the following: “Bulls put in a hammer daily candle right at 1 year old trendline support. Now, they need to follow through”. This trendline of course referring “the” bull market trendline connecting the October 2022 lows, with the March 2023 lows, which was at yesterdays lows.
What happened when we tested it Its no coincidence - we put in a large bullish daily hammer candle at support yesterday, then today, we continued up. As readers recall, this sequence bullish confluences got me long yesterday afternoon, and I intended to hold this position. I wrote yesterday: “I am holding my long runner still and will hold this as long as we are above 4290ish now - this could be a few day position if bulls cooperate”. This long played out quite well, with price never going below 4290 to invalidate and seeing a big green day for 45+ points from my entry.
Is it too early for bulls to celebrate? It is - after all - only 1 green day after 6 of last 7 red. In today’s newsletter I’ll talk this, break down the setup that triggered yesterdays capitulation move into the bottom, then discuss the actionable trade plan for tomorrow.