Was That All For The Pullback In SPX? March 7 Plan

My newsletter yesterday was entitled: “SPX Has Not Seen Three Red Days Since January 3rd. Will It Now?”. This title was derived from a staggering statistical feature that I have discussed frequently since January. Namely, that since the 4 red day dip that started off 2024 (Dec 28-Jan 4), ES has not had more than two consecutive red days in a row. It has had 7 pullbacks in this span, and every single one has been bought in ES to fresh new highs.

The final paragraph of my newsletter yesterday stated the following: “We are heading into the rare “third red day” territory. So far this year, bears have been unable to pull it off. My lean is always to defer to the broad trend. As long as 5088-81 can hold, ES can try to backtest up the levels to 5105, 5117-19 direct”. Today, we saw exactly this. Overnight we held 5088-81, then continued up the levels today to 5119 and beyond, before a late day mini-dip and plenty of chop.

Was yesterday really it for the pullback? In today’s newsletter, I’ll talk this, I’ll then do a deep dive into the short setup was saw yesterday. This was a rare breakdown trade, and saw a 60+ point flush down. Finally, I’ll discuss the actionable trade plan for tomorrow.