Will This 2 Red Day Dip Get Bought In SPX, As Usual? April 3 Plan
My newsletter yesterday was entitled “Does this SPX Dip Have Legs”, and the answer to start the day was yes, and this means two red days in a row for ES. As I’ve discussed extensively, but ES has been locked all year in an intense “buy dip regime”, but its been fairly predictable: There have been 6 two red day dips this year (including today, all of which were bought to new ATHs) and 2 three red day dips, all of which were also bought. We have not gone more than three red.
I wrote yesterday: “Bear case tomorrow: 5267 needs to fail” and ES wasted no time getting started on this, cracking 5267 before the open and starting a sharp leg lower that melted through all supports. Where did this sell take us to? It should be no big surprise. I wrote yesterday: “Bulls fully control above 5243-46 triangle resistance. We could dip down there, and it is a normal, regular back-test”. We dipped down there, and spent all day basing in this general zone. This back-tests the area that we broke out from after the March FOMC meeting, and we then ralied off it for a nice late day rally.
Will this two day dip get bought like the others? In todays newsletter I’ll talk this, I’ll then go into the technical cause of this sell (hint: Its the same setup that causes every large sell, and every large rally) and is essential to know. I’ll then discuss the actionable trade plan for tomorrow.