The Dip Was Bought in SPX. All Clear For Bulls? May 11th Plan

In yesterdays newsletter, I wrote: CPI days are “the most trap filled, most challenging conditions to trade in” and ES certainly agreed, putting in massive swings in a 60 point range trapping longs and shorts multiple times, with bulls firmly winning out the day. Despite this complexity though, basic technical analysis helped navigate it well.

I spoke extensively yesterday that ES was building a classic bull flag with 4118-23 support, writing that my lean was “That the current flag shown below can play out (something like push to 4155, reaction, then breakout up the levels to 4165, 4178-81”. This played out perfectly this morning testing 4118-23 exact then squeezing to 4174 before rejecting. I wrote yesterday how the first move after CPI is usually a trap though, and trap it was, with the morning rally retracing entirely, before being bought for an afternoon squeeze.

Despite the massive volatility though and 60 point range today, ES is wrapping up the day not much changed from Monday, but - as it almost always is since March low - the dip was bought. Is it “all clear” for bulls? In todays newsletter, I’m going to address this, go over the failed breakdown setups (my core pattern) that triggered multiple high follow through trades today, then provide the actionable trade plan for tomorrow.