Pullback for SPX After A 190 Point Rally, Where Does It Stop? July 19th Plan
In yesterdays newsletter, I wrote: “Ideally, I’d like to see something like rally to 3895-3900, then dip to fill out the triangle more for the first part of next week, then breakout to 3955, 3985-4000”. Today, this played out well as we rallied right to 3895-3900, then put in a good pull back. Price is tracking the “green arrow” from yesterdays chart.
As discussed yesterday, one “reason” for todays pullback was an extremely stretched RSI, which needed to be cooled off. Today’s dip began that process, but ultimately ES is doing the same thing its done for nearly a month now: Consolidating sideways between 3750 and 3900, forming a triangle. The breakout from this structure will be massive, when it happens.
The question now becomes, when? In today’s newsletter, I’m going to talk how I approach using the RSI (a key tool), the path forward as we build this consolidation out & how I’m trading it, and the sell triggers for bulls if it comes to that.