Is Buy The Dip Running Out of Steam in SPX? Feb 7th Plan

As discussed extensively, for 2023 so far (and fundamentally, since October 2022), ES has been in an unequivocal “buy the dip” uptrend. The longest dip was a three day dip from Jan 17th to Jan 19th, which was bought, and since then there have been multiple intraday to two day sells, all of which were bought. The latest leg of this uptrend began after FOMC last Wednesday by lifting off above 4095-4110.

In my prior newsletter, I talked about how this breakout level had not been back-tested yet, stating my loose lean was that we get the backtest on Monday. Overnight and into the morning session, we dipped into the zone, backtested it, and rallied out. Was this once again it for the downside?

Of course though, this “easy” cycle of rally, 1-3 dip, rally to new highs, cannot sustain forever, and traders should be on guard for more complexity. In today’s newsletter I’ll be discussing this, talking my favorite setup (the failed breakdown), then providing the actionable plan for tomorrow