The Next Leg Down Begins for SPX, What Is The Magnet? August 31st Plan
In the last couple newsletters, I talked about how ES was in a relief bounce phase before heading lower, and that came to an end decisively today. In my last newsletter I wrote: “If 4020 fails, we trigger down directly which would see 3985 but my guess is probably continues all the way to that 3870 level below at minimum”. The drop to 3985 came rapidly and we spent the majority of the rest of the day consolidating here.
We broke down a *major* 3 week base last Friday in ES and while there will certainly be big squeezes/rallies all bounces need to be seen as counter-trend knife catches until a major resistance (former support), clears to provide evidence that a low is in for a more sustained, multi-day rally. In down-trends, knowing these levels is everything.
In todays newsletter, I’ll be talking how I traded yesterdays action via todays plan, talking the big picture setup here, then discuss targets for this leg + squeeze triggers.