The First 5 Red Day SPX Stretch Since Oct 2023. What Does Friday Bring? April 19 Plan

My newsletter yesterday was entitled: “4 Red Days For The 1st Time In 2024. Bounce Time?”. The answer was “sort of”, as we tried and the session essentially ended unchanged. We are now 5 red days in a row, which is the first time ES has done this since the October 2023 major bottom. It is also no coincidence where this 5 day sell took us. As readers recall 5045-50 was the target for yesterdays shorts, and I wrote on Tuesday: “Bear case tomorrow: .. 5082 failure is the big warning shot..5046-51 would be the target for this, where I’d likely exit runners”. We got there yesterday, and its been a battleground since

I had been writing about this level for weeks, and I wrote on Tuesday: “5045-50: Back-test of the major green triangle pattern shown below, that we broke out way back on Feb 22nd. This is a massive support and high confidence long zone if we get there”. I added yesterday: “ES has arrived at 5045-50 major support, and now bulls are put to the test. My general lean is as long as 5045-50 keeps hold, we can bounce back to 5077-82 and try the reclaim”. We tested 5045-50 three times this week. Yesterday, it hit and played out for a 50 point bounce, this morning, it hit again and played out to 5077-82+, then this afternoon, tested a third time.

Despite the multiple bounce attempts though, ES still closed marginally red today, making it 5 red in a row. Can a bounce begin tomorrow? In today’s newsletter I’ll talk this, I’ll then do a deep dive into my secondary setup type: The back-test and the its relation to today’s price action. This is perhaps the most prevalent of all setups. Finally, I’ll discuss the actionable trade plan for tomorrow.