Is SPX About To Start Another Leg Down? June 25 Plan

Almost universally - while the talking heads are debating the complexities of macroeconomics and its effect on ES prices - a simple, singular line is often nearly entirely driving price action and providing precise, profitable entries. In this case I am referring to the 5519 level. As readers recall, this level was resistance of a picture-perfect “megaphone” pattern dating back to February/March (shown below) and this was my upside target for the entirety of May.

On June 12th, we hit it to the tick after CPI, then early last week, broke it out to 5580s. What does that then mean? It becomes support and I wrote last Wednesday: “5519: This was my target since early May as posted here daily, resistance of the upper lime green line in the below chart, which forms a massive “megaphone pattern”…Now, it is support”. On Friday, we back-tested it to the tick and bounced 25 points, then today, re-tested it and bounced another 40 points. This singular, simple trendline paid out 65+ points cumulatively.

I concluded my last newsletter by writing: “Today, we backtested the megaphone at 5519 and this is the big shot for bulls. As long as 5519 holds, we can work back up to 5560”. We saw this exactly today and rallied to 5560 for 40+ points, before selling off back to - no surprise - that 5519ish zone again, which finally failed late day. Is ES about to start another leg down? In today’s newsletter I’ll talk this, I’ll do a deep dive into the setup that triggered these longs, then discuss the actionable trade plan for tomorrow.