Calm Before The Storm In SPX? FOMC Volatility Incoming. July 25th Plan
As readers know, I usually conclude my newsletters by providing a general lean or guess to the next days price path. I concluded my last newsletter by writing: “I’d like to see something like bounce from 4564 back to 4580-90, perhaps dip”. This played out absolutely perfectly today, and we held 4564 last night, then got the rally back to 4590, then dipped.
Ultimately though, after the biggest consecutive rally since October 2021 last week (8 days in a row of higher daily highs), ES has now put in 5 daily candles stacked side by side - this is very significant, and suggests a large move is incoming. I wrote in my last newsletter: “We are now into messy post-trend conditions after a 190 point rally, so days like yesterday and today will be the norm, and they will punish those who are trying to “predict”. We are consolidating now for the next big move, and there is a *very* obvious catalyst to start it: FOMC on Wednesday.
What pattern is forming, and how is it likely to break? In today’s newsletter I’ll talk this, I’ll then break down a fundamental tendency/pattern that I use nearly everyday (and that allowed me to catch Thursday’s shorts and then Friday’s and today’s longs). I’ll then provide the actionable trade plan for tomorrow.