Is The October Rally Done Already? Oct 21st Plan
This week in ES started off with a bang: We tested 3590 support first thing when futures opened on Sunday and then put in a 180 point squeeze, continuing the fresh October bear market rally leg that began last Thursday after the CPI report. My 1st target for this leg was 3775 and I wrote “I favor a bullish path that sees something like 3765-70 pullback and chop around sideways for maybe a day or so to back-test some of the above supports, then breakout”.
We tested 3770 on Tuesday, and since then have been stuck in a brutal sideways range largely between 3680-3770. As stated yesterday, this is OPEX week (tomorrow) which means to expect trappy, indecisive action and this was most of the session today. While this type of indecisive chop is normal after a big rally - on an OPEX week - bulls tried losing a key support late day today at 3680.
The question now becomes, is this it for the “October” seasonal rally that began on October 13th? In today’s newsletter, I’ll talk about how I traded today’s messy action via yesterdays plan (the good, the bad, and the ugly), then talk about whether this rally still has legs and what my targets are for it. Important day incoming.