Bounce Day for SPX, Will It Be Sold Again? Feb 28th Plan
After putting in 3 big red weeks in a row (we have not put in 4 weeks of lower lows yet in 2023), as I discussed in my newsletter we closed last week at an extremely important spot, back-testing the widely watched downtrend line from January 2022. We started off the week with a not-surprising bounce off this level.
In my last newsletter, I talked extensively about the important off the very specific 4022-25 zone holding on this bounce, writing: “In terms of spots I’d attempt shorts if we do start a squeeze, 4013 as well as 4022-4025 would be the reversal spots. If bears are going to step back in, that’s the spot”. Precise technicals today, and we rallied right to 4024 short zone in ES, inside that 3 point bullseye zone, then sold 40 points.
With ES bouncing off critical support then rejecting, it is safe to say that what happens here has major implications for the next few weeks. In today’s newsletter, I will talk why that 4022-25 zone was resistance to produce todays short, talk some of my rules, then discuss what’s next/the actionable trade plan for tomorrow.