Dead Cat Bounce Or Bottom? June 27th Chart and Plan

Patience has paid off. My last newsletter was entitled “ES Coiling For a Big Move” and as I wrote here last week, I’ve been long with a 3850, 3900-3920 target and we got there in one day Friday. In my last newsletter, “I wrote A break through 3800 would likely ignite a fairly significant rally that would probably match or exceed other bear market rallies this year (8-10%)” and we certainly seem on track.

I continue to hold a long position and day trade around it. The last two weeks action were extremely rare historically, with ES putting the most bearish week since the March 2020 capitulation, then last week completely reversing the 5%+ weekly loss to close higher, something that has not happened since the November 2020 multi-month low (5% weekly loss then reverse the following week).

The question now becomes: Can ES put in a multi-week run? This is something ES has not done since March this year, and we only need to look back one month see a green week identical to last week that then consolidated for a week or so and failed to new lows. In today’s newsletter, I’ll discuss why the setup here may have some legs, risks for bulls, and why I think trading will be difficult this week