Big Rejection For SPX; But *Major* Catalysts Loom This Week. January 10th Plan

Classical technical analysis again showed its utility the last two trading days in ES. As readers know, since mid-December I had been tracking a textbook triangle pattern building between 3820-3900. My lean since that mid-December period was that this ultimately breaks higher to the 3950-75 broad resistance zone, and today the wait finally paid off in full as we completed a 150 point rally to that target zone and sold off hard in the afternoon.

While this has been good trading both on the way up then with the afternoon selloff today, it is very difficult to read much into what this recent action means big picture. Why? Because we have two big catalysts this week. Powell speaking tomorrow morning, and far more importantly, CPI on Thursday. The last 3 CPI’s saw violent 150+ point, often bidirectional swings right after.

This is going to be another week where tactical day traders make money. In today’s newsletter, I’ll talk the big picture setup, how I use scaling to get short on days like today, then the actionable trade plan for tomorrow.