We Are About To Enter One Of The More Volatile Weeks Of 2023 In SPX. December 8th Plan

After a 470 point rally in November, ES has been in what I call “post-rally hangover mode”, spending over two weeks in one of the most stubborn (yet lucrative) consolidations of 2023. After a move like we had in November, the market has two options: 1) A sharp selloff or 2) Weeks of consolidation. It’s been clear since Nov 25th that the market chose 2.

The range has generally been 4550-56 to 4575-80, with multiple excursions above and below. Why did I mention above that its been a “lucrative consolidation?”. Because the 4556 level has tested 32 times, most of which paid out with large 20-40 point rallies, and trading the last two weeks has been as simple as buying it over and over. As readers recall, I got long at 4555 at the close yesterday, adding: “As long as 4556 keep holding, ES can fill out the range more and return back to 4573, 4580, dip, 4590+”. We held 4555 with a brief fake down to 4548 overnight, the squeezed right up to 4590 target for +34 points.

We are finally nearing some catalysts though to break us out of the range. NFP tomorrow, CPI Tuesday, FOMC Wednesday (the latter two are most important), along with futures rollover starting tomorrow + OPEX coming up next Friday. This range won’t last. In today’s newsletter I’ll go over the pattern forming here/targets, do a deep dive on how my core setup (the failed breakdown/trap) produced today’s 40 point squeeze, then discuss the actionable trade plan for tomorrow