Biggest Green Day Streak For SPX Since December 2023. Pullback Soon? May 12 Plan

This week has been a testatment to the power of simple chart patterns and their ability to cut through noise to the essence of what price is doing. While many were engaged in complex and unnecessary macro analysis, price action made things clear and ES spent April building a singular structure: A perfect, month long bull flag, which broke out Monday. My newsletter on May 2nd was entitled: “SPX Is Coiling Tight For A Trend In The Coming Days”, and I wrote in that newsletter “5155: Resistance of the major red downtrend channel/flag shown in the below chart. Leg to revisit the highs begins above here”. On Monday, we broke this out, and the leg to revisit the highs began.

This continued into today. I concluded yesterday by writing: “My general lean is always to defer to the trend though - as long as bulls can hold 5203-09 on any dips (assuming we get one), we continue to 5255, 5262, 5268-72”. This played out nicely and ES wasted no time on this one, getting to 5255, then 5262 2nd target by 11am, and then finally running out of steam at target #2 and basing for the day.

Despite this, we are now *7* green days in a row, in the biggest green day streak since December 2023. Is a pullback incoming? In today’s newsletter I’ll talk this, I’ll then do a deep dive into the setup that got me long at 5202 yesterday, provided to readers the day before, as it is a good example of a non-traditional failed breakdown (a slight variant of my core setup). Finally, I’ll discuss the actionable trade plan for tomorrow.