SPX Finally Snaps Its 9 Green Day Streak. More Red Ahead?

The S&P 500 (ES) ended its historic nine-day winning streak on May 6, marking its first red close since April 23. This streak was the longest since 2004 and capped an aggressive "buy-the-dip" regime that began after the April 6 low at 4835.

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As highlighted repeatedly in previous issues, institutional buying has been visible through repeated Failed Breakdown setups—my core trading signal. These patterns have created explosive upside moves, with last Wednesday’s setup being a textbook case: ES flushed from 5493 to 5457, trapped shorts, and recovered. That long triggered a 180-point rally, hitting the macro target of 5672, a back-test of the red megaphone structure broken in early April.

Late Thursday added fuel to the rally. A Failed Breakdown below 5628 triggered yet another leg higher, taking ES to 5720 into Friday. But after nine straight green days, a pullback was likely. As I warned in Friday’s edition: “We are 9 green days in a row and it’s not uncommon to see what I call ‘hangover Monday’.”

Market Recap: May 6 ES opened with weakness, dipping overnight to 5665 before briefly flushing to 5655. It recovered key support at 5672 by 10AM, triggering longs up to 5706. However, the rally faded into the close—marking an inside day and signaling possible trend fatigue.

Failed Breakdown Setups in Focus I’ll break down:

• The Thursday evening Failed Breakdown below 5628 and how it set up Friday’s explosive move.

• How to manage these trades using my Trailing Stop Methodology.

Actionable Trade Plan for May 7

• Watch 5665 and 5672 support zones. If ES bases and holds here, another squeeze higher is possible.

• A confirmed breakdown below 5650 could trigger shorts toward 5600.

  Learn More:

• S&P 500 snaps 9-session win streak after latest Trump tariff

• Wall Street wobbles as markets navigate through tariff uncertainty; Fed in focus

• Stock Market Live May 6: Spooked Investors Continue to Sell S&P 500

• Veteran analyst sends urgent message on S&P 500

• Stock market today: Dow sinks, S&P 500 posts worst day of 2025 after Trump forges ahead on tariffs

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