Dips Continue To Be Bought In SPX, But For How Long? November 16th Plan
In yesterdays newsletter, I wrote “As long as above [3955], I do favor that we continue up to 4030, 4055, but I will be prepared to trade the break-down if it triggers”. This morning, after PPI data was released, we squeezed up to 4050.75 then began a dip. At around 1pm EST - this dip accelerated and the “reason” was due to something we have not had in a while - headline geopolitical risk which kicked off a couple hours of intense algo-driven volatility.
Since the November 4th low at 3700, ES has been in firm “buy the dip” mode with only two red days in the period (one of which was a small red day yesterday) and both of which were quickly bought up back to new daily highs the following day. Readers of this newsletter know why: On Nov 4th, we hit support of a perfect multi-week bullish triangle pattern. Last Thursday, we broke it out.
ES is certainly “due” for either proper pullback or a choppy period of consolidation to “digest” the recent rally, but with the 200 day moving average just overhead (a major magnet) will it get there first? In today’s newsletter, I’ll be talking the setup here, sell triggers to start the next leg down, and discussing my core pattern: The failed breakdown.