Its Decision Time For SPX. October 3rd Trade Plan
Last Wednesday, after a relentless essentially 9 consecutive days of straight downside, ES put in its first attempt a relief rally. At the close last Wednesday, I wrote: “I am holding my long runner still and will hold this as long as we are above 4290ish now - this could be a few day position if bulls cooperate”. We got a relief rally that lasted a few days and the reason was well defined: ES tested its core bull market trendline from the October 2022 low making it *must hold* this week and today, it re-tested.
This week started off with massive chop, and I wrote on Friday: “As it has all week, the 4300-4350 zone remains an extremely choppy range, with 4335 being a sort of mid-point pivot inside this zone will take tactical, flexible trading”. It certainly did, and what did we do since the Sunday futures open? Played this range - Popped to 4350 last night and sold off, then this morning, popped to 4335 and sold off to ~4300, which set the low for the day. Simple levels work.
ES is now in a difficult spot though - building a 50 point base right at support of a now essentially 1 year old rising trendline. This level though, is now tested twice, making it vulnerable to breakdown. Can bulls defend it? In todays newsletter, I’ll talk this, I’ll then break down in detail an important variation of my core setup - the failed breakdown, then discuss the actionable trade plan for tomorrow