Are We Headed Back To ATH's In SPX? June 4 Plan

For nearly all of May, ES was in what I’ve called buy dips Mode. Overnight Tuesday into Wednesday last week, that temporarily changed when ES broke down a two week support structure at 5302, beginning a multi-day stretch of sell the bounce that lasted until Friday afternoon and I warned last Wednesday: “This means bears have the ball now short term”. For two days, all bounces were routinely sold, until Friday afternoon when bulls took back control.

I wrote in my Thursday newsletter: “The majors would all be spots of interest for me for longs, 5210 and 5197-5200 in particular”. We hit 5210 Friday afternoon which saw a fairly routine 20-30 points rally. Then, suddenly in the last 30 minutes of the day, ES went into a violent, short squeeze, with ES erasing the entire selloff from Tuesday in the span of a couple hours. This rally took ES to resistance of a week long bull flag, shown below at 5305. I wrote on Friday: “We are currently sitting right at resistance of a week long bull flag/channel at 5305. This is an absolutely massive resistance”. Price started today by doing what price usually does at massive resistances after 100+ point rallies, dipping, and we sold off for most the morning into the afternoon before the dip was bought in the afternoon violently, just like Friday, to take us right back to flag resistance.

Are we going to break out again? In today’s newsletter I’ll talk this, I’ll do a deep dive into the anatomy of the Friday late day squeeze, which was a quintessential example of my core setup, the failed breakdown, and demonstrated how powerful they can be. Finally, I’ll talk the actionable trade plan for tomorrow.