Will Today's Dip Get Bought In Spx Like The Others? April 11 Plan
Today was CPI today as I stated yesterday “without rival the most volatile, trappy technically significant, difficult to trade days of the year for ES”, this CPI day delivered on this front, putting in a 100+ point selloff within 15minutes of the 830AM report. While CPI days are complex, they nonetheless share a set of defining, predictable traits that traders can exploit. The cardinal of these? CPI Days Trap, over and over.
I wrote yesterday: “CPI days are defined by traps. While not always the case, most CPI days comprise a full day of trading compressed in an hour or two, and this means plenty of traps. Usually the first move is a trap, but often the second, third etc”. We saw exactly this today, and the first move was a trap, with ES hitting 5177 then rallying to 5226 (trap 1). We then dipped from there back to 5192 (trap 2), before squeezing and trapping up and down all day around 5192. Why 5192? As written yesterday, ES has spent two weeks building a bull flag “with 5274-76 breakout zone now, and 5191 support”. Action like this is why failed breakdowns are my core edge, and when you know how to recognize and exploit traps, you can trade them alongside the institutions, rather than being liquidity for them.
After all is said and done though, where does this leave us? The core theme all year has been what I call the “dip buy regime” in ES, where every single dip has been bought (at an absolute maximum within 3 red days, but typically within 2). Will today’s be as well? In todays newsletter I’ll talk this, I’ll then go over one of my less discussed (but equally powerful) setups. I’ll then discuss the actionable trade plan for tomorrow.