Pullback Day For SPX, Buyable Dip Or Bigger Sell Starting? Dec 6th Plan

As readers know, my primary target in ES for several weeks was the 4110-15 zone, and this area (which was the high last week ES rejected at) was no coincidence. As nearly everyone has now noted in the past few days, this level was the core downtrend line from January highs in ES. We clipped it to the tick last week, and rejected. The power of a simple trendline.

I wrote on Friday that this is a major, strong resistance and: “I do not expect this to clear without some complex trading first. Markets do not make things easy, and I expect we may need more back-testing or consolidation first”. Today, ES decided to put in a pullback day, with loss of 4040 triggering shorts for the day as per last newsletter. The problem for bulls, is in doing so, ES also lost its 200 day moving average, which cleared last week.

Ultimately, everything this week is complete noise with CPI and FOMC next week. In today’s newsletter, I’ll be discussing what the loss of the 200dma means, the actionable trade plan for tomorrow, and the setup into a huge week next week.