Will Today's Mini-Dip In SPX Get Bought Like The Others? Sept 23 Plan
A couple weeks can make a very dramatic difference in ES. It was only two Fridays ago that ES tagged 5455 in the final minutes of trading, 340 points off yesterdays highs. As I often say though, markets are just an elaborate machine built to trap and that early September sell was the mother of all traps. I wrote in my Friday September 6th newsletter: “Obviously a short squeeze is around the corner”, and “Remember that when ES short squeezes - it is violent. We could recover this entire selloff in a day or two easily if ES really wants, just like we did at August lows”.
This was quite prescient as the Monday immediately after, we began a recovery and by this Tuesday, retraced 100% of the September selloff. That was not all ES had up its sleeve though, and after FOMC day on Tuesday, ATHs were loading. I wrote in my newsletter sent out at 4pm on FOMC day: “As long as 5680-85 keeps holding we can simply continue building out the base we have spent the last several days in. As long as this range is in tact though, it targets AThs directly. This could look something like pop to 5724, dip, return to 5736, perhaps final dip, then breakout. 5775, then ultimately new ATHs to 5797+ are in play” This played out fantastically well, and we tagged 5797 target exactly yesterday, which set the high of day.
From here, we finally got the 1st pullback leg from ATHs today and we began a choppy, grinding move lower. I wrote yesterday: “After a 300+ point rally, setups are very scarce. Longs are risky (rug pull risk is very elevated, its a matter of when, not if), shorts are risky (I don’t short strong uptrends), and messy chop risk is high. After a strong rally, I like to sit back and let price discovery unfold, waiting for price to “wake up” and reveal its next hand”. Will this dip get bought like the others? In todays newsletter, I’ll talk this, I’ll do a deep dive into the setup that got me long on Wednesday at the close 5685 (it was a picture perfect failed breakdown and a great example to learn from). Finally, I’ll discuss the actionable trade plan for Monday.