After 5 Sell Days In a Row, Is A Rally Incoming? September 2nd Plan

While we saw a great late day rally in ES, today was the 5th sell day in a row where a lower low was made. It’s no coincidence; we broke down a major, 3 week long head and shoulders pattern last Friday, and since then every bounce has been sold. While I don’t typically place a huge value on this - it is also no coincidence where we set a low today, and ~3900 happens to be the exact measured move target for last weeks head and shoulders breakdown, in classical technical analysis.

In yesterdays newsletter, I spoke about how I was short with a 3925 target (where we spent nearly all day) and how the potential for a short squeeze was building. With the RSI now extreme oversold, 5 sell days + the measured move target hit for the head and shoulders pattern, the potential is here, but bulls still have some *major* hurdles to clear, and the broad trend remains down.

In todays newsletter, I’ll talk how I traded today’s choppy mess via yesterdays plan (it wasn’t clean), talk some of my favorite bottoming patterns/rally triggers, then discuss the plan for the final day of Summer trading tomorrow