Is SPX Headed For New All Time Highs? Not So Fast. Nov 22 Plan
I’ve spent plenty of time in my last 3 newsletters talking about the concept of “magnet levels” or “ATM Machine Levels”, which refers to a zone we see often once or two times a month that pays out over and over again. As discussed since last Friday, for this week, it would be the 5886 level which held last Friday, held on Monday, put in a huge Failed Breakdown Tuesday which produced a 100+ point rally, then re-tested again yesterday morning, culminating in today’s rally.
I was prepared for another test of 5886, writing on Tuesday at 4pm: “We may not be done with 5886 yet - it is common for these magnet levels to test many times and even though we tested it Friday, yesterday, and put in two failed breakdowns today, do not be shocked if it makes a few more appearances this week”. It held yet again, triggering another monster long which +100 points again from yesterdays low, into today.
What were the targets for this long? I sent out my newsletter early at 3pm yesterday, stating: “As long as [5886] continues to defend though we are still in a relief bounce leg and it has a few obvious magnets. Since we broke down a base at 5943 to start today’s sell, the backtest of this would be the first magnet. After a reaction there, we can work up higher to 5972, then 5980-88 which is resistance of the yellow flag structure shown in the above big picture chart that we have built since the election week highs”. This played out perfectly today. We rallied to 5942 by 430pm yesterday, saw a big sell reactions there, then squeezed to 5972 by this morning, saw another big sell reaction, then on to final 5980-88 target.
Can ES see ATHs from here? In today’s newsletter I’ll talk this, I’ll do a further deep dive into some of the recent action we had at the 5886 magnet level (given we have magnet levels 1-2x every month, its essential to know the various ways in which engages them via Failed Breakdowns and routine tests). Finally, I’ll talk the actionable trade plan for tomorrow.