Will This Dip In SPX Get Bought Like All The Others? June 22 Plan
Yesterday/today ES did something relatively rare in the past 2 months: It put in 2 red days in a row. In this case, it occurred after an incredible 8 green day in a row streak, which was the longest such streak since May 15th. Why did ES suddenly decide to sell yesterday? Remember - its never random when ES decides to sell after an uptrend. In fact, we can determine exactly when it will occur. When does it occur? As I wrote on Wednesday pre-selloff: “I simply honor the trend *until price loses a support* to tell me bears may be making a play - then, I short”.
It occurs when ES loses a well tested, previously defended support, and yesterday, it did just that by losing the 5560 level triggering shorts. This was a massive battleground support on Wednesday and Thursday, testing 5-6x. Yesterday, it failed, and we got a sell. Most interesting though, is where this selloff took us today and where we bounced.
Readers recall that my target for the the last two months as stated daily was 5519. We hit it last week, then this Monday, we broke out. I wrote yesterday: “5519-22 is the next major down, and this backtests the massive, 3 month megaphone pattern we broke out on Monday”. This morning, we backtested 5519 exactly - to the precise tick - and set the low of day. Will this be a more sustained bottom? In today’s newsletter I’ll talk this, I’ll do a deep dive into my favorite short setup which triggered shorts at 5560 yesterday, then I’ll discuss the actionable trade plan for Monday.