[RE-SEND] 3 Green Weeks In A Row For SPX. Can October Start Red? Sept 30 Plan
NOTE: This is a resend of the newsletter for Monday September 30th, originally sent out on Friday, for those who did not receive. The Friday newsletter also had the incorrect chart, which was corrected in this newsletter. Apologies if you have received this more than once as substack is having delivery issues.
Today was the final full week of September trading in ES. I spent the introduction section of this newsletter for the last couple weeks talking about the importance for day traders to trade price, and ignore the rest. September started off with a multitude of breathless headlines talking about Bearish Seasonality, referencing it being the “most bearish month of the year”, and referencing the back half being particularly bearish. What did ES do instead? It rallied 3 green weeks in a row and 380 points from the September 6th low.
It is essential to rememeber that price by its nature traps. Things like macro or seasonality tell us what price has done or what it should do, but only trading price itself with blinders on tell us what institutions are doing - right now - and how we should trade. Since early September price has told us they are buying. Ths rally came in a few stages. First was the capitulation move September 6th and I wrote on that day: “Obviously a short squeeze is around the corner”, and “Remember that when ES short squeezes - it is violent. We could recover this entire selloff in a day or two easily if ES really wants, just like we did at August lows”. That week ended with a massive bullish weekly hammer candle. The next step, was to make a new all time high above the July high, and I wrote in my September 16th newsletter last Wednesday: “As long as 5680-85 keeps holding we can simply continue building out the base we have spent the last several days in. As long as this range is in tact though, it targets AThs directly. 5775, then ultimately new ATHs to 5797+ are in play”. Last Thursday, we tagged 5797 exact.
The final step was to make a new ATH above that one, and I wrote in my Wednesday newsletter this week: “The short term bull case is that this current consolidation represents a mature bull flag 5790 to 5740, with 5770-72 key mid-pivot. This would likely see 5803, 5808, 5823+ for tomorrow”. Yesterday we got to 5823+ dipped, backtested 5790, then returned to 5823 by 11am today before dipping.
At the end of the month, since the September 6th low, ES only put in 3 red days. How much longer can ES really keep this up though? In today’s newsletter I’ll talk this, I’ll go over how a singular level can (and usually does) provide multiple failed breakdowns (my core setup). In this case, the 5767 level which triggered most of my trades this week. Finally, I’ll discuss the actionable trade plan for tomorrow.