SPX Is Coiled Ultra Tight *Again* For A Move. What Way? June 19/20 Plan
Note: The levels below here now all reflect the new September 2025 ES levels (ESU2025). ES has rolled from June to September.
Today was FOMC day, and we headed into it with a backdrop of war in the Middle East. As technical traders though, we can only focus on price action and in this regard, two things were true heading into today: 1) Since April 6th - as stated daily - ES has been in what I call buy dips mode. We get dips, sometimes they are large, sometimes they even last a few days, but they get bought. 2) Since June 5th, ES had found itself stuck in a range with 5979 support, 6099 resistance, and a 6050 magnet in between.
While the above context is interesting, it doesn’t help us trade. To do that, we need a setup, and for me, this means Failed Breakdowns. I enter only when price flushes a significant low, traps shorts, and recovers. Last Thursday evening, the above two points and Failed Breakdown married together nicely. War in the Middle East broke out, and ES flushed 125 points down to 5979 range support. I wrote last Tuesday at 4pm in preparation that “I especially like the Failed Breakdown of last Thursdays 5981 low especially if we tag 5978 first.” What did we see Thursday evening? Exactly this. We tagged 5978, recovered the Thursday June 5th 5981 low, and longs triggered. This long produced a monster leg right up the range. I wrote Friday at 4pm: “In a strong bull case, ES won’t even re-test 5978. Rather, it will base out above 6027 (with traps below being bought). From there, its back to 6059, then up to 6081, 6099.” On Monday, we hit 6099 range resistance, and then yesterday, sold down the range to 6050, the ultimately 6018 last evening driven by more war headlines.
For FOMC today, the task for bulls would be to recover 6050 and buy that dip. I gave several setups. I concluded yesterdays newsletter by stating: “My general lean is always to defer to the trend. Bulls want to defend 5979 lowest on any FOMC traps down (but ideally, price won’t get anywhere near that). Recovery of 6045-50 then starts us to 6082, 6099+” This 6045-50 level was an ATM machine today, recovering multiple times for a good rally to ~6076 high of day.
Then after FOMC, we flushed down to 6026. I wrote yesterday at 4pm: “6034 is first down. This is already well tested this afternoon. I’d prefer to see a Failed Breakdown of this afternoons lows to long here, ideal would be if it can tag 6026 first.” At 3pm, we hit 6026 *exact* recovered 6034, and rallied to 6045-50 again.
Today was a goldmine for level to level traders but ultimately we spent it mostly at the 6050 magnet. We are coiled tight here for a move. What way? In today’s newsletter I’ll talk this, I’ll do a deep dive into a quality Failed Breakdown we had right off the Sunday open this week at 6028 (provided to readers on Friday) which triggered an 80 point leg up. Sunday Gap Down Failed Breakdowns are one of my favorite setups. Finally, I’ll talk the actionable trade plan for tomorrow and Friday (tomorrow is a holiday).