Bear Market Rally or Bottom? May 3rd Chart and Plan
In yesterdays newsletter, I was fairly confidently looking for a flush lower to 4070 with 4020-30 below there and I was short as written. We got a very nice flush down to 4070 and which point bulls said “no more” and we got the (by now familiar to most) violent short squeeze.
As I’ve written often lately, volatile trading regimes like the one we are in now are characterized by very wide range moves, which back and forth wide range chop, deep flushes lower, then short squeezes that retrace the selloff in usually half the time. This is environment now, it is not easy to trade, and expect more of it.
Today ended with one of those violent squeezes and notably it recovered the March low after losing it. This technically is a fake break down setup, and is a good probability reversal signal short-term. Today, I’ll discuss what I’m looking for into the big FOMC meeting Wednesday, as well as discuss more tips on how to trade this challenging environment