SPX Is About To Breakout A 4 Month Downtrend. November 13th Plan

NOTE: This is a resend of the newsletter for Monday November 13th, originally sent out on Friday afternoon, for those who did not receive.

This and last week, ES saw a historically significant rally, putting in a rare 8 green days in a row. Yesterday, ES finally managed to break the cycle to put in a single rare red day (which resulted in a good sell to 4355), but today, bulls (no surprise) rapidly bought it back up. While this may seem unusual, it is important to note that the last time ES saw 8+ green days in a row was October 2021. In that case, it put 10 green days in a row in, saw a single red day on Day 11, then continued up for another 8.

Why did we see a squeeze today? I wrote yesterday: “4377 triggered the breakdown today, and therefore it will be important on the back-test and a key pivot. If we bounce up there, it may provoke a tradeable sell on the 1st test. If bulls can regain that 4377-4386 cluster, the bottom is probably in and shorts are risky”. We saw this today and we tested 4377-86 first thing in the morning 8:20AM, saw a 10 point sell on the 1st test, then bears dropped the ball and we reclaimed 4377-86. This was the bottom trigger, and started the squeeze.

As of writing this, ES is poking above its main downtrend. Was that 1 day dip all bears are going to get, leading to a repeat of October 2021? In today’s newsletter I’ll talk this, talk about the setup that caused today’s massive squeeze, then provide the actionable trade plan for Monday.