Bulls Win FOMC Day (Again). Was It A Blow off Top For SPX, Or More Coming? Dec 14 Plan
Today’s FOMC took ES parabolic, as a major continuation of the trend that started back on November 14th. Recall the reason “why” this rally started: On Nov 14th ES broke out of its textbook down-trend channel from the summer highs and got me long originally. Incredibly, in this last month following this, ES only put in a single, solitary day where it closed below its prior days low. This action shows just how powerful simple pattern can be, and it was the breakout of this clear structure that both started this move, and sustained it. Multi-month channel breakouts, see multi-month rallies. Technical analysis 101.
As readers recall, I was long into the meeting today, writing yesterday: “I am holding my 10% long runner still from the 4667 failed breakdown and recovery setup given yesterday”. The initial target for this was 4730+ and I concluded my newsletter yesterday by writing: “My general though is always to defer to the trend. This would look something like test 4710-15, try a dip down the levels, then resume up to 4730+”. We saw exactly this today, and we ran to 4710 before the meeting, tried a dip, then continued to 4730 and *well* beyond.
We are now 5 green days in a row. Was today a blow-off event? In today’s newsletter, I’ll talk this, go over the setup that got me long yesterday at 4667 for this move, discuss my approach to shorting now, then provide the actionable trade plan for tomorrow.