Is the Bottom In For SPX? June 3 Plan

NOTE: This is a resend of the newsletter for Monday June 3rd, originally sent out Friday afternoon at 4pm, for those who did not recieve.

On Tuesday of this week, ES formally and temporarily transitioned from buy dips mode to sell bounces mode and Es saw a multi-day dip for the first time in May. I wrote back on Wednesday at 4pm: “ES has broken down a stubborn two week base at 5302-5345. This means bears have the ball now short term until ES can get back inside that range”. We had spent two weeks largely stuck in this range with a couple traps above and below, before finally cracking it on Tuesday. This was price telling us, in clear and objective terms, that it is ready to temporarily transition from buy dips to sell bounces.

And sell bounces it did - from Wednesday morning until this afternoon, and every bounce was sold. This morning, ES started the day with another routine bounce back to 5272, which was then sold to new lows. I wrote yesterday: “Bear case tomorrow: Starts when 5238 fails…If 5238-42 fails, we just continue lower to 5217, 5210”. After that morning bounce, we lost 5238, triggering down which got down to 5210 target - where I was looking for a bounce. I wrote yesterday: “The majors would all be spots of interest for me for longs, 5210 and 5197-5200 in particular”. We sold down to ~5210 low of day, then set the low for the day from there and put in an absolutely monster short squeeze, right back to that key 5302 level that started the dip on Tuesday.

Full Round Trip and ES is now forming a brand new, powerful chart pattern. Was this the bottom? In today’s newsletter I’ll talk this, I’ll go over why we had a late day short squeeze today as it incorporates a powerful component of my system (Hint: It was the reclaim of the 5238 level as discussed all day). Finally, I’ll talk the actionable trade plan for Monday.