After 4.5 Days of Straight Upside and+280 Points This Week, Can July 4th Week Keep It Going? June 30 Plan
Lots can change in the course of a week in ES. One week ago today ES was stuck inside a two week range (we closed last Friday at 6020), which I defined as being a large bullish descending triangle with 5978-82 support, and 6081 resistance. Middle East war headlines were prevalent, and sentiment was bearish. This week we are 250+ points higher. As readers know though, one thing I talk about non-stop is we cannot trade headlines, we need to trade the price. Why? Because headlines trap, and institutions use bearish headlines to accumulate long positions (since bearish headlines expedite price down to zones where lots of liquidity is waiting to absorb their buy orders).
Its why we need to ignore the headline flow and focus on price. Price tells us exactly what institutions are doing, and where, so we can follow. What were institutions doing last Friday? They were buying, and had been for two weeks. I specified this back last Friday at 4pm, when we were 6020, by stating: “My general lean is always to defer to the trend, until it ends. 5978-82 to 6081= a range (descending triangle) with 6050 a key magnet inside. My lean is we work back up to 6050, then 6081. Above there, we can try breakout to 6099, 6124, 6143.” By Tuesday, we got to 6143, and then ripped the rest of the week.
Remember institutions leave footprints on the chart when they buy. That footprint is my core setup: The Failed Breakdown. The typical institutional accumulation process follows similar steps: Bearish headline hits, price flushes to a major support shelf where lows are clustered. Price then loses the low, and institutions then grab all the liquidity underneath the low (shorts rushing in, stops). Price then springs above the low and a squeeze starts. I hunt this pattern everyday. Right off the open last Sunday, we had a massive institutional accumulation event, and it got us long for the week for what turned into a 250+ point long. News the US attacked Iran over the weekend flushed ES below 5978 triangle support. I wrote last Friday at 4pm: “…Wait for a Failed Breakdown of Thursdays 5970 low. Perhaps down to 5964 and back up.” We got this Sunday, and the rest was history.
This week was just a matter of holding runners until the first post-breakout pullback hit. I wrote on Wednesday, “My general lean is always to defer to the trend. ES broke out a two week triangle on Monday 5979-82 to 6081. Today, we consolidated after this breakout mostly 6140-6155. Bulls want to hold 6140 (with any traps below being bought) which sets up the next leg up to 6162, 6172, then 6208.” We got to 6208+ by this morning, before ES finally got its first micro-dip, driven by more “Tariff” headlines.
Can bulls keep the run going next week? Next week is notoriously a bullish week seasonally being a short holiday week (July 3rd and 4th are half days for futures and NYSE is closed July 4th) and next week has roughly double the return of the average week in ES. In today’s newsletter I’ll talk this, I’ll do a deep dive into a powerful Failed Breakdown we had Monday at 12:40PM as this was the terminal Failed Breakdown inside the triangle and the final “fuse” for the breakout leg. Finally, I’ll discuss the actionable plan for Monday.