Has SPX Bottomed? May 6th Plan
NOTE: This is a resend of the newsletter for Monday May 6th, originally sent out on Friday May 4th at 4pm, for those who did not receive.
Every single day for two weeks, I have started this newsletter the exact same way, by discussing the “buy dip regime” that price has been in since April 22nd. When you know who controls (bulls or bears) and at which price that changes, trading becomes much simpler. There have been many dips since April 22nd, but they all have something in common - they get bought, typically the day, and prevent ES from putting in any sustained, multi-day sells.
Yesterday morning, we got the latest dip in ES and as provided to readers in advance, I bought it ~5048, and this produced a large, 100+ point run into today. I wrote on Wednesday 4pm: “An alternative to buying [5048 again] would be to wait for a failed breakdown of today’s low” and we got this yesterday morning 10am, starting the move up. I added to this long at the close yesterday ~5088, writing at 4pm: “I am holding my 10% risk free runner and have re-upped it back to 25% exposure at 4pm” and this rally continued this morning to 5155
It is no coincidence where this rally to us to: The single most important structural resistance in ES right now; resistance of a picture perfect, month long bull flag/channel that I have discussed daily. We bottomed at support of this April 18th, and today, got to resistance at 5155-58 today and dipped. Decision time here, can bulls keep going? In today’s newsletter I’ll talk this, I’ll then go into more detail on the setup that got me long for this 100+ point leg. Finally, I’ll discuss the actionable trade plan for tomorrow.