Will Nvidia Earnings Break SPX Out of Its Tight Coil?? Aug 29 Plan

My newsletter yesterday was entitled: “SPX Is Coiled Very Tight. The Calm Before The Storm?”. Coiled tight was certainly not an underexageration. From mid-July until last Monday traders were blessed with (quite literally) historic volatility: A 600 point two week sell, followed by a 500+ point two week rally. Since last Monday, ES had been coiled up, consolidating after this recent leg.

I warned traders last Friday at 4pm to expect this early this week, writing: “ES is now working on a new consolidation largely between 5659 and 5588-92. This is a broad range and could be a playground now. If you over-trade in this range and do not intend on taking profits level to level, the market will take your money. Everything in this range is poor follow through chop and one needs to wait for the failed breakdowns, take it level to level, leave runners, stop trading”. Specifically, 5630 has been a critical magnet in this zone and as I wrote yesterday: “5625-30 is the first major support down. We have now lost and recovered this level a ridiculous 17 times in the last week”.

I wrote yesterday: “If 5625-30 fails, we could flush” and today, on test #19, we lost the support and made the round trip back down to range support. I concluded my newsletter yesterday by writing: “We are coiled tight and awaiting a catalyst (perhaps Nvidia). 5590 to 5654 is total chop (bull flag)”. Can Nvidia take us out of it? In today’s newsletter I’ll talk this, I’ll do a deep dive into some of the recent failed breakdowns we have had. This last week has been a gold mine for my core setup and one of the best educational opportunities to learn it in many months. Finally, I’ll discuss the actionable trade plan for tomorrow.