Is SPX Ready To Make/Sustain All Time Highs? Feb 17th and 18th Plan
As I’ve discussed everyday all, this week has been a carbon copy of the last two weeks, even down to the exact times that setups triggered. As readers know, I largely trade 1 setup: The Failed Breakdown. Failed Breakdowns are the footprint of institutional accumulation. They tell us a large institution has just entered a position so we can follow.
The last three weeks all saw massive insitutional accumulation right off the Sunday futures open, and this week - like the two before it, saw us get long on Sunday evening, and stay long for a 100+ point move. Every week has been the same: Futures gap down on Sunday due to bearish weekend headlines. They then flush. Shortly after on Sunday, ES then undercuts a major low from the prior week, traps shorts, then squeezes. From there, its off to the races. This week has been all about 1 level in this regard: 6020. I wrote last Friday, one week ago: “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.” Right off the futures open Sunday, we sold down to 6016-20, undercutting last Wednesdays low in the process. We then rallied to 6129 by yesterday. This entry, and target, was given a week ago.
It was not straight line though, and ES had spent the last week building out a large consolidation/bull flag, with 6020 support, and resistance up around 6125. This was a tightly coiled, primed structure. By Wednesday, ES was stuck in the 6090s, and I was looking for ES to fill out that flag to the upside, and breakout. I wrote at 4pm Wednesday: “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 this on Thursday, getting to 6125, then last night, we tried the breakout.
The job today for bulls would be to defend that breakout and I wrote yesterday at 4pm: “My general is always just to defer to the trend though. Bulls want to hold 6120-23, 6098 (if this fails it needs to recover fast) on any dips tomorrow to defend todays breakout.” We spent all day basing above 6120-23.
ES has broken its cycle of Friday collapses. But can it push into ATHs and stay there? In today’s newsletter I’ll talk this. I’ll then do a deep dive into three major Failed Breakdowns we had this week. Like last week, we had a Failed Breakdown at least once per day, but on several occasions twice. These were provided to readers in advance, and gave us a chance to add to existing runners. Finally, I’ll discuss the actionable trade plan for Monday/Tuesday (Monday is a holiday).