Are SPX Bulls Out of The Woods? Not Quite. Feb 15th Plan
In yesterday’s newsletter, I wrote: “CPI’s days along with FOMC days are the hardest, most difficult to trade days of the year. They have next to 0 predictability, and it is for this reason I recommend sizing down substantially”. For those new to trading these event days, today was certainly a good primer in how they often look: We spiked to ~4130, rallied to 4180s, dropped to 4130s, rallied to 4167, dropped to 4105 key support, then rallied to 4155.
As usual, it is only tactical day traders armed a handful of setups who ultimately profit (failed breakdowns in particular, and we got multiple high quality ones today), while those clinging to simplistic one directional biases lose out. What does all today’s action mean though? I wrote yesterday: “4105-4095 is lowest bulls want to see on any CPI spikes down”, and this played out nicely with ES spiking to a 4103 low of day then rallying hard.
Are bulls out of the woods? In today’s newsletter, I’ll be talking about my core trading setup and how it applied today, talking about the big picture setup, then discussing the actionable trade plan for tomorrow.