Its The Final 2 Trading Days of 2023 For SPX. Will It End With A Major Squeeze? Dec 28 Plan
Today was Day 3 of the infamous 7 day “Santa Rally” period and it is continuing to deliver profits. As a reminder, this period runs from Dec 22nd to Jan 4th , and is statistically interesting because not only is it the lowest volume, most illiquid period of the year, but also one of the seasonally strongest, with an avg gain of 1.4% and has not been red since 2016. Of course, I do not trade seasonals, I trade my three setups, and my process *only* but it is nonetheless important context to keep in mind.
As readers recall, I got long back on Friday sub-4800 in preparation for this rally and due to my core setup triggering - the failed breakdown - writing in my Friday newsletter: “I decided to add back a partial position here [high 4790s] to hold over the holiday, risking 25% of my daily profits”. I also provided setups to add to this long both yesterday and today for readers, and this followed through nicely for a 30+ point move on the long side and this has continued to pay out into today.
We are now entering the final two trading days of 2023, and we are doing so after the most lucrative rally in many years - 9 green weeks in a row, with last 4 days green. Are bulls about to end the year with another big run up? In today’s newsletter I’ll talk, break down the long setups we had the past couple days (these are important patterns to know), then talk the trade plan for tomorrow.