SPX Dips After A Parabolic Rally. Will This Get Bought Like The Others? Feb 27t Plan

Last week was historic for ES in many ways. Not only did ES put in its single largest green day since November 2022 on Thursday (+2% days are very rare in ES), but this occurred after an already historic rally, where 15 of the last 17 weeks have been green and we have not had two straight red weeks since October 2023.

Last week was also somewhat “historic” for my own track record; as readers know I was in a single long from from the 4973 entry provided Tuesday at 320PM, until today when trailing stop finally triggerd. I wrote back on Tuesday: “One could long above 4971 which was the cluster of lows from yesterday we broke down late day today (perhaps 4973 entry)”, while the setup was a textbook failed breakdown, the follow through was extraordinarily rare both in terms of points and duration of hold, and the fact I was able to stay was purely a function of the parabolic nature of the rally and the fact that there were no dips large enough to trigger trailing stops via the trailing stop system.

After this rally, today was an expected “hangover session”. I wrote Friday: “As mentioned above, it has been very common to have choppy, bearish “hangover Mondays”, and today certainly fit the bill, and we spent nearly all day chopping around the 5093 level before a late day selloff (just like last week). Will this get bought like the others? In today’s newsletter I’ll talk this, I’ll do a final overview of last weeks rally (entry setup + trailing stop system). I’ll then provide the actionable trade plan for tomorrow.