Has A New Leg Higher Finally Begun In SPX? October 10th Plan
Friday was the most technically significant days in weeks. Not only was it the single largest range green day of 2023 with ~117 points from the low to the high of the day, but what that green day accomplished was also important: ES reclaimed its core bull market rising trendline from the October 2022 lows at ~4310.
This week, I was looking for a buyable dip to start the week, writing on Friday: “We likely will retrace some (and possibly a large percent) of today’s rally early next week” and due to headline risk over the weekend, this happened instantly at the futures open. This dip was buyable, and I wrote on Friday: “As long as we are above 4310 bulls control. We can pull back all the way there and it simply a healthy retracement. If it does fail, I’d want to see no lower than 4295 for a quick failed breakdown then spike back up”. I added: “My general lean is we can see some retracement/pullback, then ultimately head up to 4366, 4377-80” This played out essentially perfectly today and we dipped to that 4310 zone at the open, back-tested it, then rallied to 4375 high of day.
The question is, what next? After essentially two weeks of relentless selling, ES has 1) Reclaimed its core bull market trendline Friday with the biggest reversal day of the year and 2) Held it today, and squeezed massively. Can there be more follow through? In today’s newsletter I’ll talk this, I’ll then breakdown in detail the setup that caused Friday’s rally (its my core setup), then discuss the actionable trade plan for tomorrow.