SPX Coils Up For Its Next Big Move. What Way? October 7th Plan
For the last week, traders have been spoiled: We put in two massive trend days Monday and Tuesday, running from my core 3575 support level to 3785 target zone. Yesterday (Wednesday), while the uptrend generally paused, ES offered big, bi-directional swings - a nice selloff in the morning to 3745 then big afternoon rally.
What happened then today? What typically happens after big moves: Consolidation. The market needs time to digest, and we spent most the day in a range, with poor follow through chop. I warned about this in yesterdays newsletter, writing: “There is a chance we continue this choppy action around this (3785) level. Remember that after clean trend like early this week, consolidation is high odds”
The wonderful thing about consolidation though is always resolves with a big, multi-day trend move. Seasonally bullish October started with a major bullish reversal on the daily chart by losing then reclaiming Junes low, and this is now the 1st consolidation/test of this leg. In todays newsletter, I’ll be discussing what way I think this ultimately breaks, how to trade inside this consolidation, and then discuss the plan for tomorrow, where there is a big 830AM NFP report.