SPX Goes Full-On Parabolic, How Much Does It Have Left Though? Oct 15 Plan
Its been an incredible rally and one of the most lucrative moves of 2024, and as readers know we have been long since 5820s Thursday/Friday. As I wrote in Fridays newsletter, the last couple weeks have been a technical analysts playground and can be aptly defined in only two words: Bull Flag(s). The efficacy of technical analysis lies in its ability to cut through noise. Most traders are very distracted and focused on all the wrong things: They are focused on “macro” (which is mostly priced in, has no ability to help us time the market, and the market is always 10 steps ahead), they are focused on the latest headlines (which everyone sees meaning there is no edge in trading those), or they are focused on the latest sensationalistic chart their favorite influencer posted on social media designed solely to drive engagement.
They then wonder why 95%+ of retail day traders lose money. Technical analysis ignores it all and focuses on the only thing that matters: Price, which tells us what institutions are doing in real-time so we can follow. Last week? Institutions were accumulating and did so via two bull flags. The first was 5734 to 5805 and I wrote exactly 1 week ago at 4pm: “Bull case tomorrow: No change. 5734 to 5805 is a large consolidation, and this consolidation is a bull flag. The bull case is that we just work this back up to the upside. This would mean pop back to 5786-88, possible dip there, then tackle bull flag resistance 5805. If this flag breaks out, we see a new ATH to 5846”. It broke out, and by Wednesday, we tagged 5846.
Then, they formed another bull flag on Thursday and I wrote in my Thursday newsletter: “My general lean is always to defer to the trend. 5809-11 to 5840 is a new consolidation (bull flag). As long as this structure is in tact, we can break higher to 5858-60, then 5890”. We tagged 5860 by 10am Friday.
It continued into today. I wrote on Friday: “As long as bulls can hold 5842, 5834-36 on Monday, we just continue rallying. This would see 5863 revisited, perhaps 1 more dip, then on to 5878, 5890+”. We hit 5890+ by 9:50AM
Its been a massively lucrative few sessions but how much more does this have in the tank? In today’s newsletter I’ll talk this, I’ll do a deep dive into bull flags and specifically, how they interact with my 3 core entry setups. Finally, I’ll talk the actionable trade plan for tomorrow.