Major Breakdown For SPX; Can Bears Follow Through? January 19th Plan
In my last newsletter, I wrote extensively about the multi-day range ES has been stuck in between 4000 and 4020 writing “the breakout of which should start the next move”. Bulls tried *five times* this week to break this range to the upside and after the 5th failed attempt today, we finally broke the range down.
I wrote yesterday: “If 4k fails, we start a sell down the levels and I’d be quite cautious about catching knives here. We have not had a big red day in some time, and when we get one, it could be substantial”. This morning, we triggered the short setup mentioned in yesterdays newsletter on the loss of 4k and it resolved with the largest red day in two weeks to ~3945 target.
It is quite notable where todays dip originated from: Right around the 200dma and the core down-trend line from January 2022. Bears stepped in where they had to. Can they follow through? In today’s newsletter, I’ll be talking my approach to trading breakdowns like todays, talk the big picture, and discuss the actionable trade plan for tomorrow.