Did SPX Bulls *Finally* Drop The Ball? July 28th Plan
After yesterdays FOMC volatility, post-FOMC today delivered even more with massive, bi-directional moves, with bears ultimately winning out. My final paragraph of the newsletter yesterday stated the following: “I am holding long still and waiting for breakout”, and this played out fantastically (to start), with a 40 point overnight rally, which got 5 points off my target 4640 target. As readers recall, I got long 4580 originally as provided in the newsletter yesterday for +55 points.
Why was I long into today? Simple technical analysis - we spent the last week building a perfect ascending triangle pattern. Yesterday, this pattern broke out and I wrote yesterday: “4607 is resistance of a new purple ascending triangle. Breakout of this targets 4620, 4640 easily”. After a 55 point rally off 4580 support, ES got to 4635 today before rejecting lower hard. This triangle breakout evolved into a failed breakout - the most bearish possible setup - and ES promptly erased a weeks worth of gains.
Is this finally the setup bears have been waiting for? In today’s newsletter, I’ll be talking this, breaking down by core setup (the failed breakout and breakdown, there have been many the past two days), then providing the actionable trade plan for tomorrow.