Longest Green Day Streak Since Oct 2021 For SPX. Now What? May 16 Plan
This week and last week has been a banner week demonstrating the power simple, classical technical analysis. As discussed non-stop, good trading is a matter of noise reduction. Everyday you will be inundated with a variety of opinions and complex “macro” analysis. The primary task is to always ignore it and ask what is price saying. Price reflects what institutions are doing, and as traders we are professional institutional money followers. I want to know how the institutions are trading, and I want to follow them blindly.
On May 2nd, they made it clear, by breaking out a perfect, month long bull flag pattern at 5155 ending a month of accumulation. I wrote on May 3rd “Leg to revisit the highs begins above here” and since then its been *10 green days in a row* and we got to the highs, just as planned. CPI today took us up for the most recent leg in this and I’ve been long since 5236 yesterday. I wrote yesterday: “I am holding my 10% risk free runner long still from the 5236 entry discussed above and trailing stop has been initiated” adding “My lean is always to defer to the trend. As long as 5257 holds on any CPI dips, we can continue up to 5284, 5294, then 5302+”. This played out incredibly well today, and we rallied after CPI to 5303+, making it to fresh all time highs.
We are now green 10 days in a row, the longest win streak since October 2021. Are we about to March into new all time highs? In today’s newsletter I’ll talk this, I’ll go over the setup that got me long yesterday at 5236 (it was a fairly textbook example of my core setup, the failed breakdown). Finally, I’ll discuss the actionable trade plan for tomorrow.