Dips Are Being Bought in SPX, But Can It Continue? Monday November 7th Plan
In yesterdays newsletter, I wrote: “NFP day, this means expect another session that is likely trap-filled and difficult to trade”. This was probably even an understatement, and we saw massive bi-directional swings within a 90 point range and multiple traps. Despite the massively challenging volatility, ES closed the day with a nice green candle, and this green candle could not have come at a more important point.
In yesterdays newsletter, I talked about the importance of the 3720 level, and stated my general lean was as long as that could hold, I’d be looking for the rally leg to continue to 3800+. We tested it 7x and held for a late Friday squeeze. It is important remember why: That 3720 zone is not only the 50% retracement of the rally from October lows, but also back-tests an important multi-week inverse head & shoulders pattern. In other words, the rally from Octobers low is alive as long as it holds.
However, next week is once again packed with event risk with CPI on Thursday plus mid-term elections, both of which can rapidly send ES back to 3600. In today’s newsletter, I’ll be talking the path ahead next week, the essential triggers to know when to get short + discussing how I traded today’s mess