[Re-Send With Chart] How Much Does This SPX Rally Have Left In The Tank? April 24 Plan

This is a resend as the first newsletter forgot the chart

Yesterday and today saw one of the better longs of the year. Since April 6th (where we set the most recent low way down at 4835), I’ve spoken about how ES is in what I call buy dips mode. ES is in an obvious macro downtrend/bear market and has been since December, making lower highs, however, within this, we’ve been in a major relief rally leg since that April 6th low, where every major dip has been bought.

As discussed all week, we’ve had quite a few of these dips: We had 430 point sell on April 9th, 375 point sell on April 10th, 130 point sell on April 11th, 233 point sell last Wednesday, and 56 point sell last Thursday and Monday a 177 point sell. As readers know, I love these selloffs not because they are good shorts, but because in downtrends, as a rule, all major selloffs are followed by a face ripping short squeeze. Face ripping short squeezes are caused by my core setup: The Failed Breakdown, which refers to when price flushes a major low, traps bears, recovers, and squeezes.

The last major dip was on Monday and we sold all day. Many were quite bearish and calls for new lows were prevalent. I entitled my newsletter that day, “New Lows Coming For SPX? Not So Fast”. Why “not so fast”? Because as readers know, late in the session on Monday ES put in a massive Failed Breakdown of the 5155-50 zone (this was a 1.5 week low set on April 10th) and on Monday we flushed it and recovered, triggering long and I wrote on Monday at 4pm that I was long, stating: “I am holding a 10% long runner from the 5156 reclaim setup… I will let this work.”

I was looking for a rally to 5248-52 and beyond from there, also writing on Monday at 4pm: “My general lean is ES can try to backtest 5231, then 5248-52. Bulls need to clear that to get excited about anything…Once 5248-52 clears, ES can head significantly higher to 5315 then 5377+.” Yesterday, this long paid out for 177 points and we got to 5377 by the 6pm open last night.

Heading into today, I was looking for more on this, and I wrote at the close yesterday: “My general lean is to defer to the immediate trend. 5252 to 5328 is a new range/flag. It can fill out but as long as it remains in tact next leg up sees 5377/5386, 5415, then 5425-28.” ES got right to work on this after the 6pm gap open last night, rallying to 5377 then 5425-28+ and up to 5499 this morning, before dipping and closing around 5425

This was an incredible move, but how much more is in the tank? We also have a big gap below. In today’s newsletter I’ll talk this, I’ll go into detail the setup that caused this monster squeeze (Failed Breakdown off 5155 on Monday). Finally, I’ll discuss the actionable trade plan for tomorrow.