First Mini-Dip After 150 Point Squeeze, Will SPX Buyers Step Back in? August 12th Plan
After the 150 point breakout squeeze yesterday, today saw the 1st breakout pullback. Price is tracking the “green arrow” in yesterdays chart perfectly showing a push to 4265 and dip to backtest 4200-4170 broad zone. Breaking this 4200-4170 zone yesterday and into today was very significant: This was the major peak in June that stopped upside and triggered a 560 point sell, and has been the cap since then.
Not only did it clear the zone, it cleared it with strong momentum, and by a large 60 point margin making it a break-out by all technical definitions. Pullbacks after a breakout are normal, expected, and healthy but as I have written frequently in prior newsletters, the period (1-3 days) after a breakout is also the most significant period in markets, because it informs whether the breakout is confirmed, or whether it fails which typically markets near-term tops.
Tomorrow is very important. In today’s newsletter, I’ll be talking what bulls need to see tomorrow to keep upside going, how to trade it, and the levels below which we start back down again.