Three Big Green Weeks In A Row Now For SPX; Another One Incoming? Nov 20th Plan

Note: This is a resend of the newsletter for Monday November 20th, originally sent out on Friday afternoon, for those who didn’t receive.

One week ago exactly, on Friday, my newsletter was entitled: “SPX Is About To Breakout A Major 4 Month Downtrend” and this title could not have been more apt because on Tuesday - with CPI as the catalyst - ES broke out its core downtrend channel from the August highs. What followed was what always follows when a multi-month trend breaks out: We melted up violently, and this was one of the trades of the year for me.

Since Wednesday however, ES has been consolidating. After being green nearly everyday this month, the market has to cool off, and this is done via consolidation. Today was OPEX day, and this consolidation went into overdrive. I wrote yesterday: “OPEX days are notorious for pinning around a level and poor follow through”. I added “My general lean is unchanged, as long as 4507-10 keeps hold, we can fill out this 4507-4535 range. It will a playground for level to level traders in this range”, and this is what we did today, ping ponging in that range all day with 4534.50 the regular session high of day.

After 3 green weeks in a row, ES is now building a base since Wednesday. Can ES manage another leg up again, even though we’ve been green everyday this month with the exception of 2 days? In today’s newsletter I’ll talk this, go over the pattern that is currently developing these last three days, then provide the actionable trade plan for Monday.