SPX Is Basing For A Big Move. What Way? October 17th Plan
Last week, ES finally broke an incredible 5 week red streak (5 red weeks in a row) putting in a green week. As I had discussed extensively, this green was not any normal green week from a technical perspective, but was caused by ES reclaiming its core bull market trendline from October 2022 on October 6th. The result was a large 187 point rally from the Oct 6th low, to last weeks high.
Late last week, we finally saw a dip after this 187 point rally, putting in a couple red days to close out the week. I saw this dip as short-term buy opportunity and I concluded my newsletter on Friday by writing the following: “As long as 4355-58 keeps holding (4345 on any quick spikes down) I favor ES continues to fill out this new three day range. This would involve a retest of 4387-90, then 4406”. This is exactly what we saw and overnight we tested 4354.50 which was the low of day, then rallied to 4406 and a little beyond. Ultimately though - as reference in the above quote - ES is stuck in a 3 day range largely between 4410 and 4355 since last Wednesday.
It continues to base and work off last weeks rally. The question is now is, when will it break, and what way? In today’s newsletter, I’ll address this, I’ll go over in more detail the setup that caused todays 60 point rally (it is my core setup - the failed breakdown). I’ll then discuss the actionable trade plan for tomorrow.