Jackson Hole Speech Tomorrow. Volatility Incoming For SPX. What Way? August 23 Plan

Back on August 9th, something technically important happened in ES: It put in a massive, bullish weekly capitulatory candle. It is why I entitled my August 9th newsletter: “Bullish Weekly Hammer Candle In SPX, More to Come?” While market commentators and analysts were still focused on the “macro narrative” (which guarantees you will be several steps behind); price - which is what we trade - made its intentions clear. It wanted higher.

Afterwards, we put in a 550 points, 11 day rally which only had one small red day on Tuesday prior to today. This was the largest 11 day rally streak of the entire bull market cycle that began in October 2022. Everyday since Friday in this newsletter, I’ve said the same thing: That I am looking higher, until price loses a major support to trigger shorts. I wrote on Tuesday at 4pm: “My general lean is always to defer to the trend, until supports fail to suggest otherwise. For tomorrow, 5612-5630= a new consolidation/flag zone. As long as it holds, we can push to 5642, 5651, then 5662-5674 which is the next large resistance cluster up”. We got to 5662-74 this morning, then finally sold.

I then wrote yesterday: “We still have not had a proper selloff, and when it does come, it will likely see multiple majors fail in one easy flush.” We got started on this today, putting in an 80 point sell. Ultimately though, its all noise as tomorrow is the Jackson Hole Speech at 10am. This will be a high volatility event - last year we trapped then rallied 180 points. Will todays dip get bought? In todays newsletter I’ll talk this, I’ll go over the setups that got me long for yesterdays and todays rallies (hint: It was my core setup, the failed breakdown). Finally, I’ll discuss the actionable trade plan for tomorrow.