Yesterday's impressive rally in the SPX notably retreats today. Observers and traders alike may wonder if it's just a temporary pause in the uptrend or a precursor to a protracted sell-off period? Drawing from our focus on Failed Breakdowns, we offer the insightful analysis your investment strategy needs.
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Regime / Market Behavior Overview
It's been nearly two months since the market has entrenched itself in a 'Buy Dips Regime.' Despite the fluctuations due to headlines, data releases, and various catalysts, institutions consistently adopt the strategy of buying via Failed Breakdowns.
Setups in Focus: Failed Breakdown / Breakdown Short / Back-Test Short
A Failed Breakdown, as we know, can occur when institutions strategically shock the market, causing a sell-off to use for their benefit. On Sunday, Monday, and Tuesday, we observed a well-executed Failed Breakdown, with the market quickly recovering and racing to beat previous records.
Market Structure and Key Levels
The market structure also presented another Failed Breakdown opportunity before Nvidia's earnings were released. Once the market recoiled to 5893, it triggered a bear trap. Following this, Nvidia's earnings were announced, leading to a recovery and a subsequent rally.
Trade Plan for Next Session
Considering the history and pattern of this 'Buy Dips Regime,' it's anticipated that dip buyers will continue to step in, just like before. However, we will dive deeper into the recent Failed Breakdowns, providing a data-driven, actionable trade plan for tomorrow.
Disclaimer:
This newsletter is for informational purposes only and does not constitute financial advice. Please consult a licensed financial advisor before making investment decisions.