Massive Pre-Christmas Volatility; Important Friday Incoming. December 23rd Plan
Back on Monday, as readers know I got long at ~3810 for the 1st relief bounce leg of the selloff that started after CPI last week. This confirmed Tuesday with a bullish daily hammer candle, and ES was off the races making it all the way to its 50 day moving average at 3917. While things looked to be setting up nicely for continuation into Christmas, bears had other plans, and after GDP at 8:30 today ES went into a 100 point melt-down.
Late day though, bulls managed to step back in with a massive short squeeze/bottoming pattern and it couldn’t be more timely. As most know, the last five trading days of this year then the first two of the new year are the infamous “Santa Rally” period, and this means that the Santa rally phase formally begins tomorrow, since Monday the market is closed.
What tomorrows candle looks like will be key and extremely important. In today’s newsletter, I’ll be talking the very powerful pattern I am now watching, how I think tomorrow plays out, and the actionable trade plan for tomorrows session.