The Entire "War Dip" Was Retraced In SPX. Can It Make News Highs Though? June 17 Plan

Note: The levels below here now all reflect the new September 2025 ES levels (ESU2025). ES has rolled from June to September.

My last newsletter was entitled: “The War Dip Was Bought in SPX, But Can The Lows Hold?” The answer, was yes. Everyday since April 6th nearly, I’ve reminded readers about what I call the broad “regime” or trend ES is stuck in. While I am a day trader, it is nonetheless extremely important to understand the macro trend. Is it a buy dips regime? Or a sell bounces regime? Since April 6th, its unequivocally been a buy dips regime. We’ve had lots of dips since April 6th, but they get bought, typically within a few days tops.

However, institutions buy dips in a very particular way. Specifically, they wait for a headline to cause a sharp, algorthimically driven flush. Then when that flush takes out a low, institutions use the ample liquidity beneath the low (short orders, stop orders) to fill their buy orders, then, we squeeze. My edge is to trade alongside the institutions and enter at the same point. On Thursday evening, we saw the mother of all headlines: War in the middle east. The result, was that ES sold on Thursday evening 125 points in fairly short order.

As a Failed Breakdown trader though, dips like we saw Thursday are what pay my bills, because I know they will result in powerful short squeezes. I wrote last Tuesday at 4pm 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 for a 100+ point leg up to 6081, before retracing some of that into Friday’s close.

The mission for bulls this week was to defend Friday’s low and my lean was that they would, to trigger a Failed Breakdown long. We did right off the open last night. I wrote Friday at 4pm: “In a strong bull case, ES won’t even re-test 5977. Rather, it will base out above 6027 (with traps below being bought). From there, its back to 6052/6059, then up to 6081, 6099.” At 6pm last night, we trapped below 6027 down to 6k, trapped bears, recovered, and longs triggered. We hit all the above targets, getting to 6099 by 10am this morning.

While the war dip was bought, ES is ultimately still stuck in the same resistance region its been in for a week. Can it make new highs? In today’s newsletter I’ll talk this, I’ll do a deep dive into two quality Failed Breakdowns we had last week (both were provided to readers): One on Thursday that resulted in the 60 point squeeze we saw from Thursdays low of day to Thursdays high of day, and one on Thursday evening which set the low that lasted into today. Finally, I’ll discuss the actionable trade plan for tomorrow.