Is More Selling In Store For SPX Next Week? September 25th Plan

Note: This is a re-send of the newsletter for Monday September 25th, that was originally sent out on Friday, for those who did not receive.

One week ago exactly, I concluded my newsletter by writing the following: “The question is, now what? As reported - the next two weeks are the most bearish of the year seasonally” and this certainly applied this week, with yesterdays candle being the largest red day since two days before the March swing low (which began the 740 point rally into the early August high).

While the seasonals were a partial element in the selling we saw this week the real reason - as discussed extensively - was that on Wednesday after FOMC, ES broke down the triangle pattern it had built all summer at 4472 and from there it was elevator down. I noted before FOMC that the Triangle breakdown “targets 4418-24, then 4385” and we got to 4385 target in 1 session. Today, ES put in the 1st relief pop of the new leg down. As readers recall, I was looking for this and I got long for it at 4366 (which was the exact low to the tick), writing yesterday “If we see 4366 this evening, I’d likely try a partial bid there” and we saw a 40 point bounce from there to ~4400, before rejecting late day.

Is more downside in store next week? In today’s newsletter I’ll be talking this, I’ll then break down in more detail the setup that that triggered this weeks 100+ point sell, talk about seasonality, then provide the actionable trade plan for Monday.