Is SPX Setting Up Another Leg Down? July 29 Plan

This week was one for the record books, featuring the largest red day for ES since December 2022 on Wednesday, with ES snapping a historic 357 day streak with a 2% red day. As a result of this, ES put in another red week, making this the second red week in a row. Red weeks have been relatively rare in 2024. We only had two red weeks in a row in three other occasions, two of which bottoms were set afterwards, and one of which (in April) we put in a third red week then rallied 700 points.

My first newsletter this week on Monday at 4pm, I wrote: “My general lean is that bulls have some more energy left, and as long as above 5564-66, the bounce is in play. This would target 5630-32, which is a big inflection point”. We rallied to and hit 5629.75 high of week on Tuesday, and “inflection point” was probably an understatement with a 200 point absolute rout following.

After this, I entitled my newsletter yesterday: “After a historic sell, Can SPX Close The Week Green?”, and I was looking for a relief bounce today. We got one. When I sent out my newsletter at 420PM yesterday we were at 5438.

I wrote yesterday: “My general lean today is similar to yesterday. As long as 5428 lowest holds (or quickly recovers), ES can try another relief pop to 5498-5500, then if bulls are motivated, 5528, 5546-52”. I provided triggers for this yesterday and we got a nice 80+ point bounce into this morning getting to 5528 target exact. Will this bounce get sold like the others? In today’s newsletter I’ll talk this, I’ll discuss in detail the setup that caused yesterdays 100 point short squeeze (in bear markets, you have to know how to recognize short squeezes). Finally, I’ll discuss the actionable plan for tomorrow.