Another Day, Another Dip Bought For SPX. How Much Further Can It Go? April 20th Plan

Yesterday, I wrote about how ES is an “extreme dip buy regime” the frequency of which has been accelerating. Last Wednesday, Friday, Monday, and today were all nearly identical: ES saw a sharp selloff, switched sentiment bearish and got people calling “the top”, then squeezed. This hasn’t been just the past week though, and this has been the regime since the March 13th low.

As readers know, the reason isn’t a big secret at all, and is related to basic technical analysis 101. Every single day since March I have discussed the textbook rising channel ES has been in, which lets traders know that dips are to be bought, and this structure has driven all of my trading since then. It is also no secret where today’s morning bounce came from: Right off support of this rising channel ~4148 (low of day was 4150).

Of course though, this pace of dip buying simply can’t sustain forever and there are risks mounting. In todays newsletter, I’ll discuss how my core setup (the failed breakdown) triggered today’s rally, talk what the triggers are for this move to finally reverse, then provide the actionable trade plan for tomorrow