[Re-Send] Are Bulls Finally Running Out Of Steam? May 12 Plan

Note: The original forgot the chart.

One week ago today, the big story was that ES had put in an incredible 9 green days in a row. This was a function of what I have called - since April 6th where we set the low at 4835 - the buy dips regime and every single day since April 6th, I’ve started this newsletter by reminding readers of this, so they don’t get caught fighting the trend. After that 9 green days though, ES spent Monday-Wednesday this week consolidating and working off that rally largely between 5600 and 5650.

This consolidation formed a bull flag. As readers know, we can tell when institutions are accumulating because all rallies in ES are caused by my core setup: The Failed Breakdown, which is a footprint of institutional accumulation. When institutions want to buy, they have to hunt liquidity. This is done by flushing lows, trapping shorts, reversing. We saw this on Wednesday at 2pm. I wrote on Tuesday at 4pm: “Below 5620, we should see a new low to 5597-5600. Instead of just buying this, a safer bet is to wait for the Failed Breakdown of today’s low which is just a little above at 5607.” We saw exactly this Wednesday, we sold down to 5597-5600, put in a Failed Breakdown of Tuesdays lows at 5607-05 in the process, then rallied up the range.

From there, it was time to break the bull flag out yesterday. I wrote on Wednesday at 4pm: “We remain in a large consolidation now mostly 5600 to 5667, and its a flag. Inside this range, 5620 & 5650 are key levels. My general lean is always to defer to the trend. We can fill this out, then breakout sees 5698, 5720, 5734-36.” Yesterday, we tagged 5736 breakout target almost exact, then sold.

Today then, the task for bulls was simple: They had to defend this breakout, or we could see the first wave of selling. I wrote yesterday: “In an “ultra bull case” ES won’t even retest 5652. In this case, we’d just hold 5684 and start working on structure.” We largely spent today glued around 5684 in one of the slowest days in weeks.

Are bulls running out of steam? Its been an incredible run and in today’s newsletter I’ll talk this, I’ll do a deep dive into three high quality Failed Breakdowns we had Wednesday, including the Wednesday 5607 Failed Breakdown that triggered yesterdays 130+ point rally. I’ll also talk the difference between a Failed Breakdown and a Level Reclaim. Important to know. Finally, I’ll discuss the actionable trade plan for Monday.