Was Yesterdays Bottom The Low For SPX? May 26th Plan
We had a nice 130 point dip this week (and rare short opportunity) and I wrote in yesterdays newsletter that while the market over-reacts and thinks that every dip is “special” we have had tons like this - just in the past month alone we had a 127 point dip in mid-April, and another 140 dip early May. As I have discussed for months though, the driving theme since October has been dips are bought. Sometimes they are larger, sometimes smaller, but they are bought.
I concluded yesterdays newsletter by writing the following: “My general lean is as long as this backtest (4123-4116) holds, ES can try a relief bounce back to 4165-75, where another dip is likely. That needs to clear to set a low”. I also mentioned I was long, and this played out with perfection: We held 4123-16 multiple times, rallied hard back to 4165-75, then got a nice tradeable dip there to start the session today.
Is the bottom in? In today’s newsletter I’ll be talking about this, discussing the setup that got me long for today’s rally/the cause of it, then providing the actionable trade plan for tomorrow.