Coiled Tight For a Breakout in SPX, Waiting on a Catalyst. What Will It Be? April 25th Plan

Nearly everyday for a month, I have described the core theme in ES as being a “extreme dip buying regime” where every single day for the past 7 trading days now has followed a nearly identical template with a dip (typically into the 4140’s, occasionally into the 4130), which is then algorithmically bought. This theme has largely been in play largely since the March 13th low.

The problem, however is unlikely in March, the dip buys don’t go very far, with April being the tightest range month since January 2020. In the past week, the range has tightened even more, I discussed how ES had built a multi-day bull flag pattern, with 4177 resistance now and 4133 support, writing yesterday: “Predictability is very difficult here, as we are in a tight, difficult chop range and trying to guess how price plays in this range is not possible…but my very loose lean is that ES can fill out this purple flag”.

Fill out the flag it did, but one thing is clear, ES is setting up a move. In todays newsletter, I’ll be delving more into my system for trading these types of conditions (highlighting yet another example of my core setup), talking the broader pattern forming here, then providing the actionable trade plan for tomorrow.