SPX Breaks to New Highs—Bullish Surge or Bull Trap?

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After a week of tightly coiled price action, the S&P 500 finally burst through its range highs with conviction. Today’s breakout capped a run of powerful, institutional-driven setups, culminating in a textbook rally through 5667 resistance. But with aggressive profit-taking into the close, traders are now left asking: is this the start of the next leg higher—or a trap?

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🧭 Regime Recap: Buy Dips Still in Play

Since the April 6 low at 4835, ES has climbed +850 points in what we’ve repeatedly identified as a “buy dips” regime. Every 125–150 point sell-off over the last month has been bought, often within the same session.

This week's rangebound consolidation—between 5600 and 5667—was no different. As expected, dip-buyers reemerged at key inflection points, signaling institutions were still deploying capital.

🔍 Setups in Focus: Failed Breakdown Unlocks the Move

As always, the signal for breakout readiness wasn’t random. It came in the form of a clean Failed Breakdown—the hallmark of institutional accumulation.

Thursday Setup

• Level in play: 5607 (Tuesday’s low)

• Signal: On Thursday, ES flushed down to the 5597–5600 zone and trapped shorts beneath 5607 before recovering the level.

• Result: This triggered a sharp rally up to 5667—confirming institutions had reloaded.

Friday Breakout

• ES opened strong and drove through 5667 range highs, hitting targets at 5698, 5720, and 5734–36 by mid-day.

• Into the close, however, we saw rejection and pullback—a potential sign of trapped late longs or just normal profit-taking.

📊 Levels & Market Structure

• 5667 – Former resistance. Now becomes the key pivot.

• 5734–36 – Rejected zone. Bulls need acceptance above this for continuation.

• 5607 – High-conviction support level that’s been defended multiple times this week.

Until 5667 fails again, the bias remains bullish—but the risk of a “failed breakout” scenario is now elevated.

📈 Trade Plan for Monday

• Scenario A: Continuation
  Look for consolidation above 5667, then re-engagement with 5734+. Triggers could include another Failed Breakdown of today’s late-session low.

• Scenario B: Trap/Fade
  A clean break back below 5667, followed by acceptance below 5650, would invalidate today’s breakout. This opens the door for a retest of 5607.

Learn More:

• S&P 500 Breaks Out of Consolidation Zone

• How Failed Breakdowns Signal Institutional Buys

• Markets React After FOMC Volatility

• Technical Levels for SPX to Watch

• Is the Rally Real or Running on Exhaustion?

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