Is SPX Ready To Leave Its 3 Week Range? Feb 14 Plan

As I discussed all week, the last three weeks have been carbon copies of one another, right down to the timing of when we got particular setups. Each week started with a gap down on the Sunday futures open, followed by a deep flush. Remember here that markets trap by their nature and these traps occur via my primary setup type. Therefore, after headline driven flushes to start each week, we saw a massive Failed Breakdown on Sunday/Monday, which caused ES enter into a “buy all dips” Mode until Friday for the last two weeks. The last two Friday’s we then sold off, and rinse and repeated.

This repetitive process had the effect of “painting” on the chart a massive flag and the boundaries were clear: 6020 support and 6125 or so resistance. This 6020 level was very lucrative for us this week. I warned back on Friday at 4pm, that: “For Monday, bulls will want to hold 6016-20. This would allow ES to work back up to range resistance, starting with 6066-70 which is the 1st gateway, then 6093, then onto 6129.” We saw exactly this after Sundays open, defending 6016-20 rallying to 6093 by Tuesday.

I wrote Tuesday at 4pm before (when we were 6080s): “Bulls took control on Sunday with a Failed Breakdown of 6020, and bulls will need to defend 6020 on any CPI dips tomorrow. If it fails, they’ll want to see a Failed Breakdown right away to trigger back up, as discussed above.” What did we see after CPI yesterday? Again, exactly this. We sold down to 6020 exact, and rallied back to 6080s again by last evening.

This three weeks of up and down coiling can’t last forever though. Today, I was looking for ES to work its way up this range further. I wrote at 4pm yesterday: “My general lean is always to defer to the trend. 6020 to 6125 is a large consolidation/bull flag. My general lean is we can work up to range resistance. This means 6098, 6104, then 6125. Above there, we can work to the higher targets in the bull case….. Initial targets would be 6139, 6160-65, then 6184. Blue skies above”. We got to ~6139 by today’s close

Can ES leave the range finally? In today’s newsletter I’ll talk this, I’ll do a deep dive into two variants of Failed Breakdown we had the last couple days: A “complex” Failed Breakdown on Tuesday, and what I call a “Failed Breakdown Re-Test” we had to set the 6020 lows yesterday. You will understand exactly why 6020 was support. Finally, I’ll discuss the actionable trade plan for tomorrow.