The Calm Before The Storm For SPX? March 27 Plan

My newsletter yesterday was entitled: “A Rare 2 Red Days In A Row For SPX. Will It Get Bought Like The Others?” and the answer was (at least to start, yes). As discussed extensively, ES has been in a scheduled, relentless “buy dips” regime since November. Every single two day dip this year has been been bought, with one notable exception being March 13th to March 15th, where we put in a very rare 3 red days in a row. Bears were punished severely for this, and we put in the biggest green week of the year last week.

Yesterday, I bought the dip and today’s trade plan played out perfectly. I concluded my newsletter yesterday by writing: “The market remains in recovery mode after last weeks parabolic rally, building out structure. My lean is always to defer to the trend. As long as 5274-76 holds, ES can retest 5288, perhaps dip, then work back to 5299-5302 breakout zone”. We saw quite literally exactly this. We held 5276 at the close yesterday, rallied to 5288 overnight, dipped, then rallied to 5299-5302 target by the open today. After this move, we then put in what may have been the slowest day of 2024 so far, spending nearly all day glued in a 10 point range before a late day flush which is currently attempting to be bought again.

This type of compression usually means some volatility is incoming. In today’s newsletter I’ll talk what to expect here, I’ll then go over the setup that initially got me long yesterday for the rally to 5300 (it is a variation of my core setup and the driving force behind my edge). I’ll conclude with the actionable trade plan for tomorrow.