Has SPX Just Began A New Leg Up? Not So Fast. July 17 Plan
As I’ve written since early May, ES has been in a “buy all dips” regime for months now. While the dips have varied in size and duration, they share the common trait of all being promptly bought. On July 2nd, ES broke out of a textbook two week long bullish triangle, something I provided to readers on July 2nd when I wrote: “5519-5583= the chop zone and it forms a triangle, shown in red below. While we could ping pong this structure more, as long as it remains in tact, the path of least resistance is up and it targets 5623+”.
Since we broke out of this textbook bullish triangle, the “buy dips regime” went into overdrive and ES has only seen a singular red day: Last Thursday after CPI, and after yet another bear trap, the dip was bought also. Fortunately in this newsletter, we have been there to buy *every single one* of those dips, the reason being that institutions use a set technique to accumulate: They flush a cluster of supply, use the liquidity as a cover to put on large positions, then recover, corresponding to my core setup: The failed breakdown, which triggers long. Yesterday, we got another one with a flush into the close that recovered.
I wrote at 4pm yesterday: “Late day today, ES put in a failed breakdown. My general lean for tomorrow is always to defer to trend and this would mean popping up to 5698, perhaps dip then filling out the range more, then trying again for ATHs, with 5708, 5723 being targets”. This played out to perfection, and we began running up those targets first thing in the morning, hitting~ 5723 by close. Have we just begun a new leg up? In today’s newsletter I’ll talk this, I’ll do a deep dive into the technical details of the entry, stop placement, and structure of the failed breakdowns that triggered the dip buys since Friday. We see these daily, it is essential to learn. Finally, I’ll discuss the actionable trade plan for tomorrow.