August Ends With A Red Day in SPX. Can Bears Run With It? September 1st Plan
After 4 relentless days of rally, ES finally put in a pullback today. Nearly one week ago last Friday, ES put in the bottom trigger, which got me long at 4385. This signal was of course the failed breakdown of the prior days low. This turned into the longest single trade gain of the year for me as readers recall, staying in one position from 4385 Friday until 4518 trailing stop yesterday. For 4 days straight, every single micro dip <20 points was bought.
Today we finally got a breather and I concluded yesterdays newsletter by writing: “There is obviously risk of rug pulls now after 4 green days into a major resistance. Typically though this happens after a push higher to a new high that then fails. My loose lean if I had to give one was that as long as 4515-08 holds, we can push to 4537-4545, dip there”. This is precisely what happened today, and we got a push to a new high that failed. This morning, we spiked up into 4537-45, and got an excellent 26 point sell from there.
Despite this attempt at a sell though - the dip was (so far) bought yet again and bears have lacked follow through. Was that it for the dip? In todays newsletter I’ll talk this, then I’ll discuss my trailing stop methodology, and provide the actionable trade plan for tomorrow.