Does This SPX Dip Have Legs? April 2nd Plan

Markets just came off a three day weekend, and ES certainly made up for the lost day, effectively cramming the entirety of what would have been Friday’s price action into the evening/overnight session last night, then retracing it all today. As readers recall, last week concluded with a 60 point squeeze higher from Tuesday, into the close Thursday.

I concluded by 4pm Thursday newsletter by writing the following: “As long as 5299-5302 holds, this would setup a breakout to 5329 (major), 5337, 5347 (major) next. 5288 fail would be a warning shot for bulls”. Starting late day Thursday this played out nicely, we tested 5299-5302, and then at the open last night, ES put in a days worth of trading in an hour, rallying to 5329 1st upside target, overshooting a little, then spending the night basing right there. This morning, we then began a retrace of the big 70+ point leg up we had starting last Tuesday, selling down to that 5288 level where we spent all day.

This means ES has put in a red day, and as discussed extensively, ES has not gone more than three red days yet in 2024, with every single two or occasionally 3 red day dip violently bought to new highs (the last 3 day dip was last week). Is the same setting up for this pullback? In today’s newsletter I’ll talk this, I’ll discuss a core concept in my system, something known as “confluence” which helped set up the long from 5263 last week into today’s highs. I’ll then discuss the actionable trade plan for tomorrow.