CPI Report Delivers Largest Green Day of 2022 For SPX. Can It Continue? November 11th Plan

This past few weeks has been a testament to the power of simple, classical technical analysis/charting to cut through noise and keep us on the bullish side of this market. As readers know, I had been tracking a perfect multi-week bullish triangle pattern for several days (green in below chart). I wrote yesterday: “While these are both bullish and ultimately support ES making a trip back to 3850, then onto 3880 triangle resistance, that support cluster [3745-55] will need to survive any CPI related selloffs tomorrow”

Survive it did. We not only hit that 3880 target, but exceeded it breaking out a large bullish triangle pattern and starting a new leg up. In doing so, ES also happened to put in the largest single green day of the 2022 year following todays CPI report. As an interesting bit of coincidence, this current rally leg (the 5th rally of 2022) began on October 13th - the date of the last CPI release.

This is now the 2nd largest rally leg of 2022, and with ES just breaking out today of a major pattern there is certainly an argument for much higher prices, but we’ve seen these sorts of moves fail many times this year. In today’s newsletter, I’ll talk the new pattern that I see developing now that should control next few days, the targets for this move, and the actionable trade plan for tomorrow.