Last week we said buy 6,792. Monday opened at 6,784. Four levels, four cleared. If you know someone trading ES who could use this, forward this email. If something missed, reply and tell us. Both make this better.
Thanks! now on to business…
The leaders gave the clue last Sunday. ES was sitting at 6,865, pinned under resistance, and we wrote: “Either estimates are wrong or price is wrong. The bet here is that price catches up.”
Price caught up. Monday opened at 6,784, right at our buy zone, and the index never looked back. Banks beat. CPI came in clean. TSMC confirmed the entire semi thesis with a 58% profit jump and raised full-year guidance to 30%+ growth. By Friday, ES had cleared every level we published and traded above 7,100 for the first time.
This was the second-fastest oversold-to-overbought move since 1950. SPX went from below 30 RSI to above 70 in just 11 trading sessions. Moves like this have a strong track record, but the exceptions matter. More on that below.
The Lie moves to +2 (CONSTRUCTIVE). Was +3 (PRESS IT) last week. The direction is the same. The fuel gauge is lower. The crowd that was scared three weeks ago is now chasing. The question this week is not whether the trend continues. It is whether buyers show up when the index pulls back for the first time.
The scorecard, the game plan for the first pullback, and six levels for the week are below the fold.
