SPX Breaks Out A 1 Month Range, Starting A New Leg Up. What Are The Targets? Jan 22 Plan

NOTE: This is a re-send of the newsletter for Monday January 22nd, originally sent out on Friday at 4pm, for those who did not receive.

For the past 1.5 weeks, I have begun every newsletter by talking about the ongoing “dip buy regime” that began in ES on January 5th, after a 4 day dip to start the year. Recall that on January 5th, ES back-tested the zone we broke out from on December 13th after FOMC formally transitioning ES from the “sell the bounces” regime we had for 4 days to start the year, back to buy the dip. Since then, every dip has reliably been bought. The most recent dip which occurred yesterday, was bought and it took us into over-drive today as we broke out to new highs.

As readers know, I have been in the same long position since Wednesday, writing at the close Wednesday: “I took the 4757-60 failed breakdown long ~4762 and this was a textbook, obvious failed breakdown that met all the criteria”, and I was still holding this long into today’s session, writing last night: “I am still holding a 10% long runner from the afternoon failed breakdown” and this turned into the largest/longest hold-time trade of 2024 for me so far. The reason that this has turned into the longest trade of 2024 for me, is that since mid-December ES has been consolidating inside the same range, and today, it finally broke-out and we pushed into a new high for the first time this year. Today’s move represented 1 month of consolidation energy building up and breaking out.

How far can we run now? In today’s newsletter I’ll talk this, I’ll delve into the two setups that got me positioned for this rally (hint: they are my core setup, the failed breakdown), and finally I’ll discuss the actionable trade plan for Monday.