Jackson Hole Tomorrow - Expect Major Volatility In SPX. August 25th Plan
As readers recall, my theme for this week was relief bounce (relief was key word), largely based off last Friday’s bullish daily hammer candle, and we certainly got one. As described extensively, I got long at ~4407 yesterday and this evolved into my second largest single day gain of 2023. At the close yesterday, before NVDA earnings, I wrote that “I am holding my long runner and trailing” and my lean was: “Ideally though, base above 4442 and not even visit there, then try the run to 4470-75”. This played out perfect and we ran to 4470-75 target, based there, then tried to clear overnight and rejected.
Then what happened today? Literally exact inverse of yesterday* and after 3 straight days of upside following last Friday’s bottoming candle, we retraced yesterdays rally and then some, back into that 4390 zone that was a battleground last week. This is extreme two day volatility, and its likely just getting started, because tomorrow is the Jackson Hole Fed meeting. All this was simply to setup tomorrow. Jackson Hole can be notoriously volatile, and last years saw an incredible 171 point selloff in a single session.
We’ve seen a 95 point move up then 95 point move down in two days, ultimately to go no where. What will tomorrow bring? In today’s newsletter, I’ll address this. I’ll then go over some statistics regarding Jackson Hole days and what to expect. I’ll then provide my actionable trade plan for trading it.