Is SPX Basing For Another Big Trend Leg? May 9 Plan
Back on April 21st, my newsletter was entitled: “Three Red Weeks In A Row For SPX: Capitulation, or More Coming?”. Capitulation it was, and discussed in the newsletter after, ES formally switched on April 22nd from a “sell bounces/bears control” to “buy dips/bulls control regime”. Since then, every single dip has been bought, and last Thursday, dip buying went into overdrive, with ES breaking out its downtrend channel from April on Friday at 5145, starting a rapid squeeze. As a result, we rallied in totality 191 points in the last week with essentially no dip until this morning,
As provided a week ago, I had been long since 5048, which has been my longest trade of 2024 - simply by virtue of ES not dipping enough to trigger my trailing stop writing at the close yesterday: “I am still holding my 10% long runner from 5048 orignally entry”. Today, however, ES finally got its first dip of the current pullback leg, and so far, it was bought. I concluded my newsletter yesterday by writing: “My general lean for tomorrow is always with the trend until proven otherwise. 5224-5191 is a new basing range with a 5209 mid-pivot”. This played out perfectly today and morning, we got a nice dip down to 5191 support/buy zone, then bounced to 5209 mid-pivot and spent the day basing there.
Are we basing for another leg up? In today’s newsletter I’ll talk this, I’ll conclude my ongoing series on trailing stops (which is how I managed to stay long the last week), then discuss the actionable trade plan for tomorrow.