Will There Be A Santa Rally In SPX This Year? December 19th Plan

Note: This is a re-send of the newsletter for tomorrow (Monday December 19th), originally sent out on Friday at 5pm, for those who did not receive.

One of the most challenging weeks of 2022 in terms of catalysts (CPI, FOMC, Quad Witching) has finally wrapped up, and it certainly delivered. This weeks candle had a massive 330 point range - the largest of the year, and saw ES make both a significant new high, and then breakdown and lose both its 50 day MA and 200 day MA all in the span of one week.

Of course, at this time of year financial media typically begins speaking of the Santa Rally phenomenon. While many mistakenly refer to the “Santa Rally” as an entire December phenomenon, it is really only a back half of September phenomenon. There is also a major issue here for bulls: As readers know, ES lost both multi-week and multi-month supports on Wednesday/Thursday, triggering shorts, and any Santa Rally therefore has technical headwinds.

In todays newsletter I’ll be talking the setup early next week, the broad structures I am watching, how I traded today’s complex action, and the actionable trade plan for Monday