Massive Short Squeeze, But Can Bulls In SPX Sustain it? April 28th Plan
Today ES put in a massive short squeeze and this has been standard behavior for ES for months (dip, flip sentiment bearish, squeeze). As readers know, I got long at 4072 yesterday concluding my last newsletter by writing the following: “I’d like to see a back-test of the 4088 level, perhaps base there, then try to push to 4100, 4125ish”. This played out perfectly - we held 4072, rallied to 4088 overnight, based there for several hours, then squeezed to 4125 and far beyond.
As I have discussed every day for months, the only way to describe the market since the March 13th low - and even more broadly since October 2022 when the current macro uptrend cycle/bull market began - is that ES is stuck in a dip buy regime. The dips vary in size and length, but there is always an underlying bid. Since the March low there have been two 100+ point dips: March 22nd which was ~130 points and was bought, then the current leg which was also ~130 points and then bought.
But can it last? In today’s newsletter, I’ll be talking this, then I’ll be going over the setup provided yesterday that allowed entry into todays rally (breakout trade), then talking the actionable trade plan for tomorrow.