Pullback for SPX Before FOMC, Can Bulls Keep The Rally Going? January 31st Plan
Last week, we had 5 straight days of buy the dip, putting in a ~100 point green week overall, and the technical reason why this happened was no surprise: We broke out of the widely watched downtrend line from January 2022, and no need to make it more complex.
On Friday, I was looking for a rally to 4100-4110, and we hit 4109 before rejecting. In yesterdays newsletter, I wrote: “We just had a major rally and multiple clean trend days. I think more complex conditions ahead on Monday. My loose lean here without seeing the Sunday open is that we can finally pullback to 4050”, where I was looking for a bounce. This played out well, we got the dip to 4050, got a bounce, plenty of complex chop, but it then collapsed late day.
Of course though everything from now until Wednesday at 2pm is ultimately just noise, when we have the next FOMC meeting. Last 3 FOMC’s were not kind to bulls. In today’s newsletter, I’ll be talking the big picture view/critical test ahead into FOMC, my approach to trading (and surviving) chop sessions like today, then talking the actionable plan tomorrow.