Another Day, Another All Big Time High For SPX. Will This One Stick? Sept 27 Plan
My newsletter yesterday was entitled “SPX Is Coiled Tight For A Move. Breakout, or Breakdown?” As those who read the newsletter knew though, this was a rhetorical question as the answer was breakout with a very specific target. After rallying last Wednesday to Thursday from 5680 to 5797, ES spent from last Thursday until yesterday doing what it always does after rallies: Building out a base, creating a chart pattern for a move.
This base was largely 5790 to 5740 with a 5770 key mid-pivot, and the pattern was a flag. I wrote in yesterdays 4pm newsletter: “The short term bull case is that this current consolidation represents a mature bull flag 5790 to 5740, with 5770-72 key mid-pivot. This could continue to fill out in a myriad of ways, but as long as the structure is in tact, bulls control and this structure targets new ATHs. This would likely see 5803, 5808, 5823+ for tomorrow”. This could not have played out better. We held 5770-72 late day yesterday, and this bull flag broke out overnight. By this morning, we had tagged that 5823 target, attaining the target for the move, then pulling back finally to back-test 5790.
In my last two newsletters, I spoke about how the importance of trading price and ignoring everything else. At the start of this month, nearly all the commentary was about “bearish September seasonality”, something I cautioned all week to ignore and September rallied 380+ points from the low to this weeks high. Our task is to follow what the institutions are doing in real time via price, not the seasonals, the news, the “macro”. These are all speculative, and tell us what institutions “should” do or what they “have” done. Only price tells us what they are actually doing, now.
After a month of relentless rally with only 3 red days since the September low, ES tried another dip today, but it was bought late day. Are more highs ahead? In today’s newsletter I’ll talk this, I’ll go over the setup that got me long for today’s run (as per last nights newsletter, I was long from 5775ish). Finally, I’ll discuss the actionable trade plan for tomorrow.