The Multi-Week Breakout Continues In SPX. Pullback Soon? May 8 Plan
Yesterday, ES did something extremely significant. As I have discussed daily here for weeks, one single chart pattern has controlled all price action (the correction) from Aprils high: A Large bull flag, which formerly had resistance at 5145. Yesterday, it broke out, and the Monday move into today is what breakout moves from multi-week long flags look like.
As readers know, I was positioned for this, and have been in the same long runner from 5048 last Thursday. I have updated the status of this long everyday since at the close, with the most recent being yesterday where I wrote: “I am still just riding my long from 5048” and it became my largest long of 2024 in point terms for a 160+ points, simply by virtue of ES not pulling back enough for three days to trigger my standardized trailing stop. I concluded my newsletter yesterday by writing: “My general lean is as long as 5186ish holds, we can base out then test 5218, dip zone, then on to 5230+” and this played out today, testing 5218, basing for hours, then getting to 5227 before finally putting in the first micro dip after a 3 day rally.
How much farther does this rally have to go, and what would trigger the first pullback of this breakout leg? In today’s newsletter I’ll talk this, I’ll go into more detail on my trailing stop methodology, which has kept me long from 5048 to 5200+, as well as how I add exposure while trailing. Finally, I’ll discuss the actionable trade plan for tomorrow.