SPX Just Put In Its Biggest Green Week Of 2024. Can It Follow Next Week? August 19 Plan
NOTE: This is a resend of the newsletter for Monday August 19th, originally sent out on Friday at 4pm, for those who did not receive.
One week ago today, my newsletter was entitled: “Bullish Hammer Candle in SPX, Can It Follow Through?” and the answer, was a resounding yes and after last weeks massive bear trap, ES heading into today put in a very rare 6 green days in a row, for the largest move in that time duration since March 2022. As provided to readers daily in advance, this week was personally significant for me, as I had been in the same long runner from last Friday at 5342, until today, writing at the close yesterday: “I am *still* holding my long runner from 5342 last Friday (inclusive of last nights 5482 add), and this has been a record breaker. I am just trailing the stop on this still”.
This was due to the fact that for a full week, ES simply never pulled back deep enough to trigger a trailing stop. In yesterdays newsletter, I spoke about how in ES, deep sells like what we saw last week are always followed by violent short squeeezes. No exceptions. I also spoke about what turns a short squeeze, into a more sustained rally. In order for it to do so, ES must recover a previous breakdown point. Last Friday, we recovered the 5342-38 zone (hence, why I provided the 5342-38 long to readers last Friday). After that, its been 200+ points of upside.
I wrote in my newsletter yesterday: “The “ultra bull case” for tomorrow, won’t even see ES get there. Rather, it will just base out below 5572 and above 5550 (if we do get any harder sells, perhaps 5528), then from there, tackle 5585 next up. This is a big one, with the August highs at 5595-5600 just above (last time we were here” we sold 480 points)”. Today, we saw this, and the morning dip was bought to tag 5585 by 1pm, which was high of day. Can bulls push through this? In today’s newsletter I’ll talk this, and I’ll do a further deep dive into the trailing stop methodology that kept me long for 200+ points. Finally, I’ll discuss the actionable plan for Monday.