Biggest Red Week For SPX Since The Last Bear Market. Now What? March 10 Plan
This week was one for the record books. The market - being bombarded nonstop by Tariff headlines - put in the most volatile week since the first week of August 2024 at least and in my personal opinion its been the most volatile week since Covid. Not only were we 9 of the last 11 days red heading into today, but every day this week ES saw at least one 100+ point move and in the case of Tuesday and Wednesday, multiple bi-directional 100 point moves. This has been a gold mine for day traders, especially those who trade level to level. In fact, if you weren’t trading it level to level, there was no hope of profit as 50-100 point moves appear and disappear like nothing, multiple times a day. Even for people like myself who have been trading ES for 15+ years, these are unique conditions.
The technicals though, as always, gave us clear structure to work with and much of yesterdays and todays action centered around a key level: 5720-23. I wrote on Wednesday at 4pm that: “If the range fails [we had been in a range for the first half the of week with support at 5757-63 mostly], we take another huge leg down that would see 5726 minimum” and by 1:45PM yesterday we tagged 5726 then rallied to 5787 by 830AM this morning. What was so special about 5726? This was technical support of a core structure in ES: A multi-month “megaphone pattern” that we had formed since November and the last test of support was January 13th from which we rallied for weeks.
Therefore, the mission for today would be for bulls to defend this megaphone support, which was at 5720-23 (since its a declining line, it drops slightly daily). This was a monster battleground today. I wrote yesterday: “For tomorrow, the bull case is that the 5720-23 multi-month megaphone pattern defends.” What did we do today? We held 5720-23 exact at 9AM, rallied to 5777, sold down to 5703, recovered 5720-23, rallied to 5740s, sold down to 5675, then by 1pm recovered 5720-23 again and squeezed for good.
This was an epic battle for price at this core multi-month month support with ES putting in multiple examples of my core setup: The Failed Breakdown.
Its now three red weeks in a row for ES, with this week being the largest red week for ES (in terms of weekly range) since the last bear market ended in late 2022. ES did manage to defend its multi-month megaphone support however, which provides some light solace for bulls. Can it hold next week? In today’s newsletter I’ll talk this, I’ll discuss some of the action we had at 5763-57 this week (relating it to my three setup types) as we’ve traded this zone over and over despite massive swings above and below it. Finally, I’ll talk the actionable trade plan for Monday.