SPX Snaps Its Largest Red Day Streak Since 2022. More Green Ahead? April 23 Plan

My newsletter Friday was entitled: “Three Red Weeks In A Row For SPX: Capitulation? or More Coming?” and as the title implies, ES has seen some statistically quite unusual selling recently. Not only did we put in 3 red weeks in a row for the first time since September 2023, but last week concluded with 6 red in a row, something we had not since since September 2022, in the capitulatory move that occurred before the current bull market began.

It should come as no big shock then that ES put in a big squeeze today. I wrote on Friday: “My general lean is as long as 4995-5000 holds, then ES can try a relief bounce, this would target 5045 again, then likely clear to 5081, 5108.”, adding “In terms of spots to add on strength, if ES can reclaim 5013 I’d probably try long”. This played out well Bulls tried this relief bounce in earnest, and we held 4995-5000, reclaimed 5013 at the open last night to trigger long. It was a choppy path there, but we finally got to 5045 target as planned, then to mid-5070s before returning to 5045 by the close.

This means that ES has finally snapped its 6 day red streak. However, one green day doesn’t change a short-term trend, can bulls follow through? In today’s newsletter I’ll talk this, I’ll do a deep dive into the combination of setups that caused Friday’s selloff then today’s rally. Finally, I’ll discuss the actionable trade plan for tomorrow.