•   After a phenomenal 250+ point rally over seven straight green days, the S&P 500 futures, ES, entered a crucial period of consolidation and correction following the FOMC announcement.

•   Remember, while we are day traders, understanding the broad "buy dips" regime is paramount; it gives us a vital tailwind, even through significant pullbacks.

•   This past week offered perfect examples of institutional buying behavior, repeatedly validating our core Failed Breakdown setup at key liquidity zones.

•   The market is now shaping into a clear flag pattern, presenting a pivotal moment for bulls to either push for another leg up or face a deeper retrace.

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•   Relentless Dip Buying

Institutions showed their hand three separate times this week, buying up every significant drop and defending key support levels.

•   Textbook Flag Formation

After a parabolic rally, the S&P 500 is now building a classic bull flag. This pattern often resolves with a continuation of the prior trend.

•   FOMC Aftermath

The post-FOMC volatility created the exact setups we anticipated, providing a clear roadmap for how institutions are positioned.

We are unequivocally in a "buy the dip" regime. The trend is up. Do not fight it. After seven straight green days, the market needed to pause and digest those gains. The past three days have been a period of healthy consolidation and correction. This is not a signal of weakness; it is the market building energy for its next move. The character of the market is simple, dips are seen as opportunities, not warnings. This behavior continues until the underlying structure breaks, a process that takes weeks, not a single red day.

The only setup that mattered this week was the Failed Breakdown. It is how institutions accumulate positions. They wait for a sharp sell-off, let the price undercut a prior low to grab liquidity, then buy aggressively once the price reclaims that low.

•   Post-FOMC Plunge: On Wednesday, the market flushed the Tuesday low of 6901. It dropped to 6882, then swiftly recovered 6901 and squeezed 50 points higher. This was the first major dip that was bought.

•   Thursday Morning Flush: Early Thursday, the market plunged again, this time taking out Wednesday's low of 6882. It hit our 6869 target perfectly, recovered the 6882 level, and ripped back to 6910. The same pattern repeated.

•   Friday Afternoon Test: The pattern completed its trifecta. A sharp sell-off took us down to the 6841-43 support zone. The market held 6843 exactly, took out the prior day's low, and then ripped nearly 60 points into the close. The playbook is consistent.

The price action this week has formed a clear bull flag on the daily chart. This consolidation is happening just below the recent highs. The levels are crystal clear.

•   Key Support Zone: 6841-43. This level was defended perfectly on Friday and remains the most critical short term support. A loss of this level would signal a deeper correction.

•   Intermediate Pivots: 6882 and 6901. These were the daily lows from Wednesday and Tuesday. They now act as minor support and resistance levels that show us who is in control intraday.

•   Major Resistance: The top of the flag pattern, currently sitting near 6925-6930, and the recent high at 6950. A break above these levels signals the next leg up has begun.

For Monday, the plan is simple and revolves around the flag pattern. We do not act while inside the pattern; we wait for the market to tip its hand.

My plan is to watch for one of two scenarios. First, a breakout above the flag's resistance around 6930. A sustained move above this level would be a clear long trigger, with an initial target of the 6950 highs and beyond. Second, a breakdown below the flag. I will not short a breakdown immediately. Instead, I will watch for another failed breakdown setup, specifically a flush below the 6841-43 support zone followed by a strong reclaim of that level. If that happens, it would present another prime opportunity to get long, following the institutional playbook. If neither of these scenarios plays out, I will remain patient and wait for a clearer signal.

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•   S&P 500 Forms Bullish Pattern, But Can It Break Higher?

•   Global Markets Watch for Clues as Inflation Reports Loom Next Week

•   Tech Sector Earnings Beat Expectations, Fueling Market Optimism

Disclaimer: This newsletter is for informational purposes only and does not constitute financial advice. Please consult a licensed financial advisor before making investment decisions.