Bulls Take Charge in the SPX: Rising Toward New Peaks?

Welcome to today's digest on the recent activities in the SPX market. Last week, our spotlight fell on ES as it navigated its first substantial downturn since April 21st, marking four consecutive days of reports painted red. Despite the persistent negative shift, the selling continued to be under control, suggesting a resilient market driven by robust underlying interests. This controlled selling gesture appears as an echo from April 6th when ES shifted its market regime toward a daily dip buying phase, which has made the SPX an attractive hub for patient investors waiting to scoop gains from the retreats.

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Regime / Market Behavior Overview

This regime shift underscores the increasing bullish bias in ES and the broader market. Sharp pullbacks - often spurred by unexpected news - found buyers who reinvigorate the market within hours. Understandably, this pattern has morphed into a daily market norm for nearly two months now, which warrants your indulgence in a bit of dip buying.

Setups in Focus (Failed Breakdown / Breakdown Short / Back-Test Short)

Friday's trading session thrust dip-buying into a new test as news of tariffs triggered the most considerable slump noted in the past month, with ES sliding 120 points down to 5760. Nevertheless, the law of the market, which argues for an equally strong short squeeze after every 'elevator down' sell-off, came to life. This rule highlighted the importance of a Failed Breakdown strategy and instigated a rally that moved the market northwards to 5843.

Market Structure and Key Levels

The bears' short-lived party on Friday morning raised questions about whether the market momentum would persist this week or succumb to further sales. The market responded with a resounding confirmation - the bulls are back in control, and they're not leaving anytime soon. As speculated on Friday, ES smoothly transitioned into the resurgence zone, fueling the journey towards the highs of 5877, 5900, then 5925.

Trade Plan for Next Session

Looking ahead, the question revolves around whether the ES has enough fuel to break the lull that has defined its course since May 13th and rise to even greater heights. In tomorrow's digest, we will delve deeper into Friday's trading session to understand the contrasting behaviors of a deep 'elevator down' sell followed by an equally intense "short squeeze." Specifically, we will discuss how the two core setup types can shape the dynamics of the bear market future and derive an actionable plan that investors can adopt on the following day.

Learn More Section

For further reading, please consider the following articles:

1. Bloomberg: Trade Markets Overview

2. Reuters: Financial Markets

3. MarketWatch: Stock Market News

4. WSJ: Markets

5. CNBC: Market Overview

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