ES Breaks Out Of Its 2 Month Downtrend: Can It Continue? May 27 Plan
All week, I’ve been talking here about how ES was consolidating as it played ping pong between 3970 and 3900ish. I discussed at length yesterday how consolidating, sideways markets produce explosive trend moves, and starting yesterday and into today we got it. Recognizing consolidation is the single most powerful trading skill in my opinion.
My 1st target for this rally was 4040 and we hit it and blew through, now holding slightly above in the overnight session. This rally today was 0 coincidence at all: For the first time since March, ES broke out of a picture perfect downtrend channel that had been responsible for the selling we’ve had since then.
Does this mean that the bottom is in and buy the dip is back? Not at all - today I’ll discuss the bigger technical picture, talk about how I traded today’s action (including a stop out I took), and talk about what bears need to do to see selling again