The Largest Sell Of 2024 Continues. Relief Bounce Incoming? April 15 Plan
Friday was the second largest red day of 2024 for ES, with steady open-to-close selling, and after a quick short squeeze to start the week, it followed through today. The cumulative effect of this that ES has put in the largest dip of 2024, in point terms. As I’ve discussed since January though, since the start of the year, ES has been in what I’ve called a “buy dip regime”, where ES does get sharp, violent dips, but they are always bought within 3 days with ES unable to put in consistent, multi-red day selling.
Since April 3rd, ES has therefore alternated predictably, between green day, red day, green day, red day, green day, red day, green day, then red day on Friday. It should have come as no big shock then, how ES tried (key word) to start this week. I wrote on Friday: “My general lean would be that ES can attempt the reclaim of 5177 Monday, and this would open up a backtest of 5195, 5202, 5219+”. This was a good bounce setup, and we reclaimed 5177, triggered longs, and put in a 36 point run to 5212 or so. This was a 62 point bottom-to-top short squeeze, but then bears stepped in. I wrote yesterday: “Bear case Monday: I view bears as having the ball now until proven otherwise…For Monday, I’d see continuation of the bear case below 5163”. This morning around mid-day, we lost 5163, triggering a deep 60+ point move lower.
This was externally aided by further middle east tensions. Today’s selling means ES has now put in two red days in a row, taking ES back to mid-February levels. Will dip buyers step in here? In today’s newsletter I’ll talk this, I’ll go over the setup that originally began this melt-down on Friday. Finally, I’ll discuss the actionable trade plan for tomorrow.