Massive Two Week Pattern Breakout For SPX; How Far Can It Run? March 21 Plan

Today was FOMC day, and it was yet again a testatement to the power of simple chart patterns. As discussed extensively, after a 230 point parabolic rally from Feb 21st to March 7th, ES spent the last two weeks broadly going sideways. When price goes sideways, it is always because it is forming a chart pattern. What was the pattern here? A bullish, two week triangle pattern.

I affirmed this yesterday, concluding my newsletter by writing the following: “My general lean though is always to defer to the trend. We are forming a triangle with 5184 support and 5246-50 resistance. As long as bulls can defend supports on any FOMC dips, my lean is it breaks out to 5258, 5276-80, 5295-5300.” It was for this reason, I was long into today, writing yesterday: “I am still holding my long 10% runner from the 5203 long discussed above, and will trail into FOMC”. Right after FOMC, this played out to perfection, and we got the run to 5258 1st target, 5276-80 second target, then arrived at 5295-5300 final target right into the close.

Where to from here? In today’s newsletter, I’ll talk this, I’ll then do a deep dive into the setup that caused the rally from yesterdays low into today and originally got me long (its the same the setup that causes nearly all vertical rallies). I’ll then discuss the actionable trade plan for tomorrow.