Bulls Win Jackson Hole Day in SPX. More Upside Next Week? August 28th Plan
NOTE: This is a resend of the newsletter for Monday August 28th, originally sent out on Friday afternoon, for those who did not receive.
For those new to trading Jackson Hole Days, today was a perfect introduction to what they usually look like. I wrote yesterday: “To begin, these days are some of the most random, difficult, 10/10 difficulty days to trade a year. They are fundamentally not predictable”. Why are they so difficult? Because like FOMC days, they are characterized by traps.
I wrote yesterday: “The reason they are difficult is because there is often extensive trapping. Price loves to make an initial move, trap traders, reverse, repeat. Often, the second, or third moves are also traps”. What happened today? Exactly this and this is precisely what we saw today. Right after Jackson Hole we spiked to 4423 (first trap), sold down to 4366 (second trap to trap bears) and squeezed. I wrote yesterday that “For this reason, failed breakdowns and failed breakouts are your best friend on these days” and today, they paid out.
At the end of the all of it, bulls won the day. I wrote yesterday that as long as 4408 holds, bulls control. Does this mean a bottom is in? In today’s newsletter, I’ll talk this, I’ll then breakdown the setup that triggered yesterdays monster sell and today’s rally. I’ll then provide the actionable trade plan for Monday.