SPX Continues To Base For A Breakout; What Way? March 29th Plan

In yesterdays newsletter, chop was a critical theme. I wrote yesterday: “We are in a clearly defined chop range between between 4000 and 4038. Trade very cautiously in this zone as it will involve heavy trapping and poor follow through and I won’t be trading much in this zone”. ES certainly took this to heart, with this mornings session being the tightest range in many weeks, trapping above and below the 4k level for nearly 7hrs.

After all the chop, we ended the day right around that 4k level again. It is important to zoom out in these conditions: We from Friday morning to Monday morning, ES relentlessly rallied 93 points (a statistically large run for that time span). Now, we are in corrective/chop mode and as of today have retraced 50% of that rally. The question is, is this setting up another big leg higher?

In today’s newsletter, I’ll be talking the setup into the end of the week here, addressing how I set stops (very important), how I trade chop days, and finally providing the actionable trade plan for tomorrow.