Week of 4/7/2024 for SPY SPX ES

We have a weekly box setup

Sunday futures opened on a huge gap up and ES ran to 5333.5 just under the 5336 level I said I would be watching closely. Though I was at Easter dinner I posted for our pajama crew that 5330-32 range could be shorted on a back test after it had already broken down from a box setup. Over the next 10 hours is presented multiple opportunities (as it indeed chopped for a while) with 5332 never violated.

Over the last year many of you have followed someone who lost you a lot of money because they called for swinging puts against trend. This is how and why I never take meaningful losses swinging against trend. We identify incredibly low risk high reward scenarios on short time frame that have a chance to trigger a larger setup. In this case that larger setup was a look above and fail of the prior week’s high. Thus, this trade had 2 handles of risk and ultimately resolved 140 handles lower. There is no reason to ever blindly buy puts (or calls) without at least having an actionable trade setup on short time frames. One could have attempted to swing short 100 times over the last year and never taken a meaningful loss.

As mentioned, this triggered the look above and fail scenario from the weekly plan. We expected a pop higher to start the week, then monitor for continuation higher. Otherwise, we short the resulting weakness from the look above and fail for the bearish engulfing week.

Because of the structure and location of the weekly candles, we now have a 3-week box setup on SPY 0.00%↑ and will play it accordingly.

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