Big Volatility Week Incoming For SPX: July 25th Plan
In my last newsletter Thursday, I wrote: “My general lean is that we dip from this area, to either 3955-65 or 3895, then continue higher to the 4095 zone”. This played out well, and we spiked into 4015 resistance, then sold off down to 3955-65 where we ended the day. This was a much needed and expected dip after a 180 point rally from Monday, capping off what was a straightforward week of trading (clean upside trend until Friday, then clean selloff).
Don’t expect this to continue next week. Not only do we have FOMC coming up on Wednesday (which is what I consider to be the single most important catalyst for markets, nearly always provoking large, trappy moves that typically act as market inflection points), but we also have major tech companies reporting. 40% of NDX reports next week.
Of course, as a pure price action trader, it is not the content of these events that matter to me. What does matter is that it will produce major volatility, which means much harder trading, but also more opportunity. In todays newsletter, I am going to go over Friday’s “fake breakout setup” - a textbook example of my favorite pattern- talk the key levels I am trading Monday, and general outlook next week.