5252 Finally Fails - Bears Rush In For Monday Selloff, Then Bounce 120 Pts. Is 5127 The Low? Gameplan April 22

Rapid selling on a true breakdown and rejection of 52.

April 22, 2025

There’s massive value in preparing before you click the buy/sell button.

Bears took charge from the failed attempt at the 5250 reclaim. I noted that “the level was worked to death” and provided a small bid for bulls. It may work but we wanted to wait for better opportunities.

Then, it failed.
Failed in a big way.

We caught nearly the entire sell by preparing, executing, and collecting profits along the way.

Here’s a 15 min chart for reference:

In yesterday’s newsletter I wrote:

5250 was a critical area, one that’s been worked to death and it may offer one last reclaim opportunity. I won’t be taking it however as it’s used up and I want to wait for a better opportunity, but I wouldn’t blame anyone who did. That leads me to a potential breakdown short on any retests of that area if we flush below, retest, and put in a fail. There’s a lot of room between 5240 and 5212, the next major area I see on the chart. Lots of risk on breakdown shorts. But… due to the fact we’ve used this so many times, we could get rapid selling on a true breakdown and rejection of 52.

Indeed, we got rapid selling.

Sunday we started off with a 50 point gap down from 5325 to 5273. We continued to sell overnight and into the very early morning, putting in a low of 5239.

When I wrote and published Monday’s letter, price was bouncing off of 5239 and was at ~5245.

Multiple novice traders (even some professionals) gave 5250 another shot at the reclaim and they were temporarily right as we bounced to 5270.

At 7:15AM we put in a single 15 minute candle that was straight down 23 points. Put in a new low of 5234, and the breakdown trade started to play out. We did what we typically do —

The same thing that happens in a failed breakdown happens in a true breakdown. In a true breakdown we:

1. Over shoot

2. Come back to retest

3. Respect the selling at the critical area and ultimately fail

We came back to retest, bounced from 5234 to 5245 where we got short at 5243.

From there?

The power of a true breakdown displayed itself.

Straight down for 4 solid hours.

Nearly all the support levels listed in the early morning newsletter received bounces, nothing else. For reference here are some of them once we started going they are:
—
Likely Supports For 4/21 are: 5212 (Paused), 5208 (5 pt bounce), 5192 (17 pt bounce), 5187 (7 pt bounce), 5157-5149 (25 pt bounce), 5142 (paused), 5135 (7 point bounce), 5129 (1.75 pts from the low)
—

I wrote this to one subscriber who privately asked me what I thought about the price action: This was at 2:23PM

I wrote: “Nearly all support lines offering bounces, nothing else. No new highs. No reclaims, no demand below. I'm short. No change really. I've been writing but at first glance, bulls need structure. First step is above 5177. Without that being built... we continue. Nothing to do”

As ES tries to find it’s bottom here, we put in a 100+ point bounce from the 2PM low April 21.

—And we anticipated this rally, noting this on X at 12:29PM:

“This is the kind of sentiment that breeds face-ripping squeezes”

Across the Twitterverse and Bloomberg, CNBC, and even in some of the chat groups I’m in — I saw nothing but doom. Everyone was talking about a 3% drop in ES as if the floor fell out from underneath them.

But, ES doesn’t move in straight lines.

It waits for everyone to get short or sell, throw in the towel, shows little hope with no demand below… then puts in a squeeze. We know this, this is the nature of ES.

Even though we were short, we felt comfort in knowing we only had a tiny runner (5%) and we have no control over where ES goes. Our job it to follow the rules and stack odds.

We bottomed a bit later at 5127.25, less than 2 points from a structural support line outlined in the letter. Finding a bottom at 5127.25 by 2:00PM EST, we took 3 targets along the way:

Entry 5243
T1 5232
T2 5216
T3 5181

Our runner was stopped at 5203 overnight.

Now we ask…is the selling over or is this bounce back up to 5251 the start of something bigger?

Let’s Dive Into Today’s Letter, Our April 22 Gameplan, And Key Levels To Be Ready to Execute On