Parabolic: 13 Days In A Row of Higher Highs For SPX. Pullback Time? Dec 6th Plan

For the past week ES has been in the midst of a parabolic rally, and I’ve been quantifying this by citing the fact that for 12 days in a row (13 today) ES has made a higher high. That is to say, has cleared its prior days high. It has been quite a classical rally however: It was caused by the breakout of a perfect two week bull flag on November 24th, starting the move up. Since then, it has been a cycle of squeeze, flag, squeeze again.

As readers know (updated daily at the close), I have been in the same long runner since November 25th, trailing the stop up daily and due to the parabolic nature of the rally, the trailing stop has not hit since then. I wrote Tuesday at 4pm: “I am still holding my 10% long runner from the Failed Breakdown last Monday November 25th - which I have updated here daily, and we have yet to have a dip large enough to trail it out”

I also wrote on Tuesday that ES was bull flagging yet again, for another push higher, stating: “There is nothing to do but let runners work until a pullback hits. ES is flagging again 6066 to 6035-38 (with 6050 a key mid-pivot). As long as this structure is in tact, we are en route to 6074 target #1, 6082 target #2, then 6102-6106 target #3.” After bull flagging all day Monday/Tuesday, we got the breakout and rallied to 6102 which was exactly the high of day yesterday and remained as resistance today.

After 13 days in a row now where ES has set a new higher high, we finally got a micro pullback into the close. Will be instantly bought tomorrow? In today’s newsletter I’ll talk this, I’ll do a deeper dive into my trailing stop methodology and specifically how I add to existing runners. This long since November 25th has been my longest held runner of the 2024 year, and its my process that gets all the credit for that. Finally, I’ll discuss the actionable trade plan for tomorrow.