The June Lows Hold After *6* Red Days, What's Next? Sept 28th Plan
Exactly a week ago was the FOMC meeting, and since the high set that day, ES has remained in one directional “sell the bounce” mode to a rare degree even by standards of this bear market putting in 6 red days with every single bounce attempt for the last week being slammed back down within the same session. This results in of the last 11 trading days, only two have been green and relatively small. While certainly extreme, its not overly unusual for this time of year, being the most bearish time of the year (2021, 2020, 2019 were all similar).
Today, ES finally re-tested the Junes low, then sprung back out to end the day in the exact same spot we have been everyday since late Friday - in the 3660-3700 chop range. While the ingredients for a short squeeze are certainly forming (heavy selling, seasonals turning around) we remain in a knife catch market and bulls have to actually do something to trigger it.
In today’s newsletter, I’ll be be talking how I traded today’s volatility via yesterdays plan, talk what the trigger is for a capitulation leg to the downside, then talk how I see rest of week playing out.