Back At The Multi-Year Breakout Point For SPX. Can Bulls Do It This Time? Jan 26th Plan

Yesterday was a trap-filled, rangebound chop day for ES as expected. What comes after chop days though? Big, clean moves, and we certainly got them today. In yesterdays newsletter, I wrote: “Bear case tomorrow: Fairly straight forward and begins on the loss of 4020. I would try the same 4016 or so short”. This short triggered overnight, playing out very nicely all the way to 3975 target, with a second chance to enter on the fail of 3995 for those who only trade regular hours.

What happened after this though? The same thing that has happened regularly since October’s low: The dip was bought, with force. In doing so - despite the massive two sided volatility, we essentially ended the day unchanged from yesterday. Importantly though, ES is right back at its core bear market downtrend line from January 2022, and the attempt to sell off it was sharply reversed.

This is now the 7th attempt to break this line out in the past year. Will this be the time? In today’s newsletter, I’ll be addressing this, talking how I traded today’s action (emphasizing my core setup - the failed breakdown), then talk the actionable trade plan for tomorrow.