Is SPX About To Start A Fresh Leg Into ATHs? July 4th/5th Plan

NOTE: This is a resend of the newsletter for both July 4th (holiday session) and July 5th (regular session), originally sent on Wednesday at 1pm.

My newsletter Monday was entitled: “The Most Bullish Day Of The Year Is Incoming For SPX” and I referenced the neat statistic that the first day of July is the strongest day of the year seasonally, green 90% of days since 2003. While Monday was a flat day, the real explosion higher began Tuesday and today.

The cause of this Tuesday-into-today 70+ point rally higher was not seasonals though, it was pure technicals. As readers know, my trading is all based around a single setup: The failed breakdown. Almost every move starts with it and on both Friday, Monday, and Tuesday ES did the same thing: It took out the prior days low, trapped those shorts as always, and squeezed. On Monday in my 4pm newsletter, I wrote: “One could try the failed breakdown of today’s low 5506” and this triggered on Tuesday morning for a 80+ point rally that lasted until today, and I am still running my longs from 5506.

All of this action has occurred inside a large, bullish triangle with 5582 resistance that we have been building for 2 weeks, and all week, 5582 has been my target. I wrote on Tuesday at 4pm: “My general lean is always to defer to the trend. As long as 5542 holds on dips (and if bulls are really motivated, 5558-63 won’t even fail), we can flag out, then work up to 5566, 5575, 5582. We saw exactly this, holding 5558-63 this morning, and tagging 5582 and breaking out the triangle.

We have now broken out a two week triangle. Can bulls sustain it, and what are the targets? In today’s newsletter I’ll talk this, I’ll do a deep dive into the setup that got me long on Tuesday for this 70+ point rally (it is my core setup, and there will be hundreds more of these this year). Finally, I’ll discuss the actionable trade plan for Friday.