Relief Rally #6 Since March 29 Fails: New Lows This Week? May 19th Chart and Plan
This week, the plan in ES was to look for a rally leg to 4110 then sell attempt. We got a good 100+ point rally that made it 4095 then ran out of steam. Today’s big down move should not come as a shock at this point - every single 3-4 day rally since March 29th high failed, and this was no different. In this case, it was eerily similar to the rally we had after the FOMC meeting: Powell spoke May 4th, ES surged 3%, the next day sold off. Yesterday, Powell spoke, we rallied 2%, then today melted down.
At some point soon, market will throw a wrench into this pattern of 3 day rally then new lows (probably to put in a more complex multi-day bear market squeeze before down again). In today’s newsletter, I’m going to discuss how I traded todays action (The good, the bad, and the ugly), then talk where I think the next bear market bounce comes from