CPI Tomorrow. Will It Take SPX To New All Time Highs (Again)? November 13 Plan

Yesterday and today saw the first pullback after last weeks historic rally, whereby we put in the largest green week of the year and the largest post-election rally in the history of the S&P 500. Like all dips though, todays was bought.

My main goal for the past week has been to keep readers on the right side of the market. As I frequently say most of trading is just knowing who controls (bulls or bears) and when that control switches. As long as you aren’t fighting the dominant side, everything basically falls into place. The vast majority of losses occur because a trader is fighting whatever the dominant trend is, and if you just align your trades with the trend - switching only when there is confirmation of a trend change via a support failure - everything else falls into place. For the past week, its been unequivocally bulls in control with “buy dips” being the mode. This morning, we lost a key support in the 6020 area and got one of those dips.

I wrote yesterday: “My general lean is 6046-6020=chop. Ideally this can fill out a little bit (perhaps pop to 6038 then 6046, then try a dip down the range or lower). Bulls will want to see 5985-88 lowest hold on any deeper corrections”. We saw exactly this today, and we popped this morning ~6038, then sold down down to 5985-88 which was the precise low of day was set and the dip was - as usual - bought.

Was that pullback all bears are going to get? CPI tomorrow will answer much of that. In today’s newsletter I’ll talk this, I’ll talk more about the idea of “control” and determining when it changes. Finally, I’ll talk the actionable trade plan for tomorrow.