Dip Buyers Step In. Is The Pullback Over In SPX? August 8th Plan
My last newsletter was entitled: “4 Red Days In A Row For SPX - 1st Time Since May. Relief Bounce Time?”. The answer was yes. As the title implies, ES did something very rare last week, putting in 4 red days in a row for the first time since May (which set a low for a 4 month, 520 point rally).
After relentless selling Friday afternoon as part of those 4 red, I got long late day Friday afternoon at 4493 - as discussed in my last newsletter. In Friday’s newsletter, I wrote: “My general lean for Monday, it is that ES can hold this 4487-93 zone, then try to retest 4520-24, perhaps small dip there, then try higher”. This (and my long) played out perfectly and we rallied precisely from 4493 Friday to 4522 overnight Monday, dipped, the continued higher as per plan.
How did I know the 4493 long would run to 4520s minimum? Technical analysis 101 and as discussed for weeks - for the first time on Friday - we backtested a perfect, 3 week ascending triangle that broke out July 12th. With such an important back-test holding, does this mean the pullback is over? In today’s newsletter I’ll talk this, breakdown the A+ setups from my system that were responsible for both Friday’s rapid selloff then today’s rally (these are my bread and butter setups), then provide the actionable trade plan for tomorrow.