SPX is Basing For A Big Move To Start September. What Way? Tuesday September 5th Trade Plan
August ended with a bang in ES putting in an incredible 5 days of higher highs in a row, equaling about 150 points of total upside. As readers know, this long was my best trade this year, lasting from 4385 buy trigger last Friday, to 4518 trailing stop out on Wednesday. After this move concluded, I wrote on Wednesday “We are now in the post-rally phase” and we spent from Wednesday to today largely chopping in the range between 4540-4515.
I wrote yesterday: “I am generally cautious on longs here, the market will need time to work off the recent rally” adding “We just had a “trade of the year” this week and rallied 155 points, meaning markets have a high chance of indecisive range trade. In addition, tomorrow is the final session before a holiday weekend, and has NFP in the morning. These are poor quality conditions”. This describes today’s action perfectly. After the evening long at 4521 provided yesterday, we squeezed to 4544 resistance and sold off after to chop all day in the 4515-4540 range.
With a big trend leg out of the way, ES is now basing to recharge and setup its next big leg. The question is, what way? In today's newsletter I'll talk this, then I'll go over how proper trade management can allow one to end green even off failed setups. Finally, I'll provide the actionable trade plan for Tuesday - when Fall volatility finally returns.