Major Support Test & Decision Point For SPX, Can Bulls Hold? January 20th Plan
Yesterday, as readers know, ES broke down a 4 day sideways base at 4000, formally beginning a pullback leg and triggering shorts. 3945 was my first target which hit late yesterday. I wrote in yesterdays newsletter: “If 3945 fails, then this correction continues straight to 3920 then 3900” and after trying a few small bounces in the overnight session, ES lost 3945 and continued its freefall to 3900 target, with 3901.75 low of day where we rallied.
This 3900 zone is extremely important, and its zero coincidence why we bounced there today. From December 18th to January 6th, ES was stuck under that 3900 level and building a base. On January 6th, we broke-out with force, triggering a 135 point rally over the following week. Since yesterday, we have retraced this entire rally, and now back-testing 3900 yet again.
What happens over the next couple days has major implications for the next trend move in ES. In today’s newsletter, I’ll be addressing this, talking how I trade choppy sessions like the start of today, and then providing the actionable trade plan for tomorrow.