Can SPX Finally Breakout Before Friday? May 17th Plan
I concluded yesterdays newsletter by writing: “Its OPEX week. Expect choppy, difficult conditions. I will be getting my points then getting out and into a runner and I have 0 interest in playing around in chop all day. For now, 4130-4155 is a deep chop zone with 0 predictability” and this could not have described most of todays action better and we spent most the day ping-ponging in that exact range, pinned around 4135.
And importantly, not only this morning: We have closed within 1% of the 4130 zone for 90% of the days in past 31. This would be 7 days now stuck in a less than 60 year point range making it the tightest consolidation in years. Why is it doing this? After the May 4th/5th rally, its technical analysis 101: Price chops to setup the next trend, in addition to that, its options expiry week which is known for pinning.
A breakout should be getting close. In today’s newsletter, I’ll be talking my system for trading chop like today, discussing my core setup (the failed breakdown and how it played into the past few days action), then providing the actionable trade plan for tomorrow.