Get started

Es!

8/4: Daily Recap, Outlook, and Trading PlanRecap As we've moved into August, we've seen a shift in the “character” of ES, with volatility returning and large, bi-directional swings in the market. Despite this, it's important to note that August is not a “bearish month” but rather a seasonally neutral month, with a +0.1% average over the last 20 years. The focus for this month will be on tactical, unbiased level to level day traders. Markets Overnight 🌏 Asia: Up 🌍 Europe: Down a bit 🌎 US Index Futures: Up a bit 🛢 Crude Oil: Up a bit 💵 Dollar: Down 🧐 Yields: Down 🔮 Crypto: Up slightly World Headlines Bond market showing early sign of stabilizing. Key Structures The core pattern containing the entire consolidation since the July 19th high was a broadening formation, which broke down on Wednesday. This pattern suggests that bears control below and bulls control above. Other key structures include the rising support trendline of the purple ascending triangle and the large rising uptrend channel in white. Support Levels Key support levels include 4525, 4517, 4509, 4493, 4487, 4476, 4464, 4448, 4441, 4428, 4411, 4395-4400, 4382, and 4376. Resistance Levels Resistance levels to watch are 4534, 4542, 4550-53, 4560, 4565, 4577-80, 4583, 4592, 4599, 4607-09, 4618, 4623, 4630, 4639, 4650, 4661, and 4671. Trading Plan For today, the short-term bull case depends on the 4509 level continuing to hold. The bear case begins if the 4509 level fails. As always, it's important to plan your zones of engagement in advance, wait for entry setup, take a level to level piece, then reset bias from scratch, and get to the sidelines. Wrap Up With the return of volatility, August is shaping up to be an interesting month for traders. Key levels and structures have been identified for both bull and bear scenarios, and as always, the focus should be on tactical, unbiased level to level trading. With Apple earnings expected to introduce some volatility into the market, it will be important to stay reactive and flexible in your trading approach. Disclosure: This is not financial advice and is for informational purposes only. Please consult a professional financial advisor before making any investment decisions.
CME_MINI:ES1!
by spytradingpro
8/3: Daily Recap, Outlook, and Trading PlanRecap The last newsletter discussed the potential for bearish seasonality in August for SPX. This was timely as volatility was unleashed shortly after the newsletter was sent out. The catalyst for the volatility and selling was the US credit downgrade, which triggered a loss of critical multi-day support. This led to the most eventful evening session of 2023, followed by more daytime volatility. Markets Overnight 🌏 Asia: Mostly down 🌍 Europe: Down 🌎 US Index Futures: Down a bit 🛢 Crude Oil: Up 💵 Dollar: Down slightly 🧐 Yields: Up strongly 🔮 Crypto: Down World Headlines The timing and reasoning of the Fitch Treasuries downgrade is being questioned, limiting the downside which was much worse when S&P Global downgraded 11 years ago. Key Structures The core pattern containing the entire consolidation since the July 19th high was a broadening formation, also called a megaphone. This pattern broke down yesterday and will need to reclaim support to trigger any sustained squeeze upward. The next major support down below 4553 is 4508-15. This is the support of the large, purple ascending triangle structure we broke out on July 12th. Support Levels Supports are: 4531-33 (major), 4527, 4516 (major), 4509 (major), 4497-93 (major), 4486, 4475, 4467, 4455 (major), 4441-46 (major), 4431, 4424 (major). Resistance Levels Resistances are: 4543, 4531-33, 4551-53 (major), 4560, 4565, 4575 (major), 4584 (major), 4592, 4599,4606-08 (major), 4613, 4620, 4624-26 (major), 4634, 4644, 4653, 4666-70 (major). Trading Plan For the bull case today, there is no short-term bull case until a resistance reclaims. For now, this is 4551-53 and reclaim there would trigger back to 4575, likely dip there, then probably back to 4605. The bear case today begins on the fail of 4531. One could short this 4527 or so with target of 4509-16. Wrap Up These are level to level traders markets and they are prime conditions. The focus will be on reacting to the action and not making predictions. If a prediction had to be made, it would be a backtest of 4553, perhaps a sell to 4509-16, then a rally from there. Disclosure: This is not financial advice and is for informational purposes only. Please consult a professional financial advisor before making any investment decisions.
CME_MINI:ES1!
by spytradingpro
8/2: Daily Recap, Outlook, and Trading PlanRecap After the ES rallied and trended cleanly for +390 points from June to mid-July, the last two weeks have been characterized by a grinding summer chop. Despite testing the 4609 level six times in the last week with two failed breakouts, the ES has remained stubbornly resistant. Markets Overnight 🌏 Asia: Down 🌍 Europe: Down 🌎 US Index Futures: Down a lot 🛢 Crude Oil: Up 💵 Dollar: Up slightly 🧐 Yields: Up 🔮 Crypto: Down World Headlines United States government debt loses it’s AAA rating as Fitch downgrades US Treasuries from AAA- to AA+ Key Structures The core pattern containing the entire consolidation since the July 19th high is now a broadening formation. This structure, called a “right angled, ascending broadening formation”, has support roughly at 4560 and resistance roughly at 4660. Support Levels The major support levels are at 4599, 4592-89, 4570-73, 4562, 4548-50, 4493-88, 4445-50, 4410-15 and 4403. Resistance Levels Resistance levels are at 4608, 4614, 4618, 4623-26, 4648-4652, 4661, 4682-88, 4706-08, 4717, 4726, 4736, 4750 and 4760-65. Trading Plan Given the current unpredictable chop, trading will be done very seldomly. If we do get some upside today, 4623-26 is considered strong and likely has one final sell off before any breakout. The bear case would begin on the fail of 4592-89. Wrap Up We remain in a period of low predictability chop and the focus will be on executing the above trade plan. If 4589 fails, it's short to 4570-73, bounce, then probably lower down to 4550. Disclosure: This is not financial advice and is for informational purposes only. Please consult a professional financial advisor before making any investment decisions.
CME_MINI:ES1!
by spytradingpro
8/1: Daily Recap, Outlook, and Trading PlanRecap ES continues its characteristic bull market cycle of multi-day squeezes followed by wide rangebound consolidation under resistance, as it has done since July 19th. This pattern is expected to continue until a breakout occurs. Markets Overnight 🌏 Asia: Down a bit 🌍 Europe: Down 🌎 US Index Futures: Down 🛢 Crude Oil: Down 💵 Dollar: Up 🧐 Yields: Up strongly 🔮 Crypto: Down World Headlines Manufacturing data weak across China and Eurozone with Germany showing the steepest decline since the pandemic. Key Structures The triangle at 4609 remains the key structure, despite being somewhat "busted". This level has been tested six times in the last week and is proving to be a strong resistance. The ascending triangle at 4569-4571 is now support. The large rising uptrend channel connecting the March lows and the May lows is the primary medium term channel, with support currently at 4405 and resistance at 4650-55. Support Levels Supports are at 4608, 4602, 4594-92 (major), 4580, 4568-71 (major), 4556, 4549 (major), 4542, 4530 (major), 4515, 4500, 4488-92 (major), 4474, 4467, 4455-60 (major), 4442-45 (major). Resistance Levels Resistances are at 4608 (major), 4617, 4622 (major), 4631 (major), 4641, 4652-55 (major), 4664, 4670, 4681-84 (major), 4697, 4705 (major), 4714, 4722, 4740-45 (major), 4751, 4762 (major). Trading Plan The bull case is in play above 4592 and 4600, with a potential breakout to 4622 and then up to 4652-55. The bear case begins on the fail of 4592, with a potential short at 4589 for a move down the levels. If 4592 fails, it's time to short. Wrap Up ES continues to consolidate and build its base. As long as 4600 holds, with any spikes down to 4592 quickly bought, ES can continue to base for a push to 4622, then a final dip, then a breakout up the levels to 4631, then the 4655 magnet. If 4592 fails, it's time to short. Disclosure: This is not financial advice and is for informational purposes only. Please consult a professional financial advisor before making any investment decisions.
CME_MINI:ES1!
by spytradingpro
7/31: Daily Recap, Outlook, and Trading PlanRecap In the past week, the markets have shown a series of traps and failed breakouts/breakdowns, with a significant bear trap occurring last Thursday. The ES sold 75 points, only to bounce back, demonstrating the biggest bear trap in 2 months. The 4608 level has been resistance for a full week, tested 4 times with one failed breakout. Markets Overnight 🌏 Asia: Up 🌍 Europe: Up 🌎 US Index Futures: Up 🛢 Crude Oil: Up 💵 Dollar: Unchanged 🧐 Yields: Down slightly 🔮 Crypto: Up World Headlines Bank of Japan appoints new head of monetary policy while buying bonds to offset the fallout from last weeks yield curve control policy adjustment. Key Structures Two basic patterns are at play: the purple triangle with 4609 resistance and 4569 support, and a broadening formation with support around 4560 and resistance around 4650. The combination of these two structures does bias bullish in terms of breakout direction targeting 4650s. Support Levels Key support levels are 4600, 4588-91(major), 4580 (major), 4569, 4560 (major), 4555, 4547 (major), 4530-35 (major), 4515, 4493-97 (major), 4487, 4475, 4455-60 (major). Resistance Levels Key resistance levels are 4608 (major), 4615, 4622 (major), 4633, 4642 (major), 4650-55 (major), 4663, 4678-80 (major), 4689, 4698-4703 (major), 4712, 4726 (major). Trading Plan Bulls should aim to hold the 4580-90 cluster on dips, with a hyper bullish case seeing ES continue to bull flag above 4600 and below Friday’s highs. Bears need 4560 to fail to see any real selling and could look to short at 4558 for a move down the levels. Wrap Up In summary, the market continues to base build with 4609-4560 being complete, random chop. The general lean is that the range will fill out more, ideally by dipping into the 4580-90 support cluster again. From there, ES can try a push up the levels to 4622, 4642, 4650-55. The 4560 level needs to fail to trigger shorts, and it would likely be a significant one. Disclosure: This is not financial advice and is for informational purposes only. Please consult a professional financial advisor before making any investment decisions.
CME_MINI:ES1!
by spytradingpro
7/28: Daily Recap, Outlook, and Trading PlanRecap The post-FOMC session was marked by massive bi-directional moves, ultimately favoring the bears. Despite a promising 40 point overnight rally, the breakout turned into a failed breakout, erasing a week's worth of gains. This may be the setup bears have been waiting for. Markets Overnight 🌏 Asia: Mixed but China strong 🌍 Europe: Up slightly 🌎 US Index Futures: Up strongly 🛢 Crude Oil: Up slightly 💵 Dollar: Down a bit 🧐 Yields: Down 🔮 Crypto: Up a bit World Headlines Bank of Japan announcement that it will allow higher rates and eventually retire it’s yield curve controls sends shock waves through markets. Key Structures Key structures include the purple ascending triangle, which broke out and then failed, and various support and resistance levels. The failed breakout is a warning for bulls, as short-term tops usually occur on this pattern. Support Levels Resistances are at 4566-68 (major), 4573, 4584 (major), 4592, 4600, 4608 (major), 4613 (major), 4623 (major), 4628, 4636, 4644-47 (major), 4656, 4664, 4673 (major). Resistance Levels Resistances are: 4607 (major), 4617-20, 4628, 4640 (major), 4650, 4663, 4668-71 (major), 4676, 4687 (major), 4700-05 (major), 4717, 4730, 4741 (major), 4755-60 (major). Trading Plan For longs, consider adding exposure on clearance of 4568, ideally after basing at the level. If selling continues, treat longs as high fail rate knife catches. For shorts, consider 4584 and 4608-13 as strong resistances and possible reaction points. Wrap Up The market is now in a volatile, complex phase that requires unbiased, level to level day trading. ES could try to engage more inside the triangle, possibly reclaiming 4568, running to 4584 or so, dipping again, then trying back to 4608. If 4555 fails, the triangle will be confirmed broken down and we can work down the levels to 4540-45, then 4527, and ultimately, all the way to 4490. Disclosure: This is not financial advice and is for informational purposes only. Please consult a professional financial advisor before making any investment decisions.
CME_MINI:ES1!
by spytradingpro
7/27: Daily Recap, Outlook, and Trading PlanRecap Yesterday's FOMC session in ES was typical for those familiar with trading these sessions. Despite being defined by traps and volatility, there were several lucrative setups. We sold down to 4580, then right after the FOMC meeting undercut it by a couple of points, reclaimed, then put in a fantastic 25 point squeeze to ~4603 resistance, before rejecting into the second trap move. However, we ultimately ended the end basically unchanged. Markets Overnight 🌏 Asia: Mostly up 🌍 Europe: Up strongly 🌎 US Index Futures: Up strongly 🛢 Crude Oil: Up 💵 Dollar: Up 🧐 Yields: Up 🔮 Crypto: Up a bit World Headlines Fed no longer forecasting recession while raising rates 25bps as expected. ECB raises rates 25bps as expected. Key Structures Some core big picture structures and levels I am watching now (from highest to lowest). These are big picture structures that drive the broad trend, and provide context and orientation to the daily price action. They are not meant to be “predictive” and I will be trading the levels in the below plan level to level, one move at a time. Support Levels Supports are: 4592-94, 4582 (major), 4572, 4565 (major), 4560, 4549, 4543 (major), 4528, 4520-23 (major), 4515, 4502, 4493-86 (major), 4475 (major), 4460, 4448 (major), 4431-35 (major), 4424, 4408 (major), 4388-93 (major). Resistance Levels Resistances are: 4607 (major), 4617-20, 4628, 4640 (major), 4650, 4663, 4668-71 (major), 4676, 4687 (major), 4700-05 (major), 4717, 4730, 4741 (major), 4755-60 (major). Trading Plan I am still holding my 10% long position. I consider everything between 4565 and 4607 to now be consolidation. Everything in this zone will be tactical, difficult chop and only traders taking level to level pieces out with 0 bias with profit. No trend until it breaks up or down, only traps and lack of conviction. Wrap Up In summary for today: I am holding long still and waiting for breakout. I consider 4607-4565 to be a large triangle and price inside this range is very trappy and impossible to predict - I will be watching for failed breakdowns to add exposure as always. My general lean is that we fill out this range more, then attempt the breakout which would target 4617-20, then 4640. 4565 fails, we sell.
CME_MINI:ES1!
by spytradingpro
ES SPX Futures - Welcome to FOMCmageddonIn reading the title of this post, I'm sure you can tell what I want to say. Since the new habit is to guffaw and lmao at any thesis that isn't bullish, because "we" all "know" US equities "always go up" and a new all time high is "in store," I'd like to point out the Nasdaq already shows signs of having topped. That July 20, 2023 candle was some 2%+ in range and on absolutely no news. And yet the SPX has not yet taken its equivalent intermediate term high. The significance of the intermediate term highs that the Nasdaq took and the SPX is probably about to take is that they represent the March of 2022 failure swing. Why does it matter? Because that swing and its destruction was the trumpet-backed announcement that the Coronavirus Disease 2019 stimmie QE bull run had come to an end. And so coming back to raid it at a time when Big Jerome Powell openly told reporters at the last FOMC meeting that no rate cuts were scheduled AND that inflation would take years, not months, to come back to levels they regard as apropos, is a very dangerous situation. The thing about tops and bottoms is that whoever calls them is always wrong, because you can only see a top or a bottom on hindsight. In the interim, as they unfold, you can only anticipate that at a certain key price level, over a certain high or a certain low, that reversal patterns might manifest. The geopolitical situation is very sharp. I note in a new call that oil is likely headed for a literal 3 handle this year. Oil - A New Long Leg Down Soon Begins And I note that the US Dollar Index is due for a rally to at least 108. DXY - The US Petrdollar And The "Prigozhin Coup" In Russia The cornerstone of the international chessboard is now, and always has been, Mainland China and its 5,000 year old country and culture, which has been ruined by the Chinese Communist Party over the course of its century of insanity. What's going on in the equities market is heavily wedded to the "War With Taiwan" narrative being espoused by the propaganda machine, which I discuss in my call on Taiwan Semiconductor TSM, a company that I believe is a significant long hedge during a potential upcoming downtrend. TSM - Taiwan, Your Semiconductor Long Hedge So as for this week's call, I would like to note that, unlike the Nasdaq, the SPX has not raided its March '22 intermediate high. This high at 4,631 happens to coincide with the new "JP Morgan Chase Collar," where one of the SIB's big funds sold calls at 4,665. I discuss this collar below: SPX/ES - An Analysis Of The 'JPM Collar' Something to understand about the big banks' business model is this: The first thing is that when they sell calls at a certain level, there is a buyer, and that buyer might be their clients. Their clients may have paid the bank the standard 10% fee in exchange for providing the liquidity. The reason the client would buy calls that JPM sells at a 10% premium is because they understand that the market will be made, in exchange, for those calls to be made worth more than they paid. Those calls were purchased at the end of June when the indexes traded circa 4,400. Why would JPM sell the calls and get themselves underwater? Because by September 29, Q3 end, they won't be underwater anymore, for one. For two, they're hedged long and are making money on the way up on the hedge. So they get to make money on the hedge, the calls ultimately expire worthless, and the client is happy because they got a big bag of cheap options at 4,400 to dump on the head of retail and Cathie Wood-style funds at 4,660. And all of this is to say that the 4,631 failure swing/pivot is very likely to be raided, and it is likely to be raided on Wednesday, FOMC day. During Monday's trade session, we will find out a lot about the intentions of the MMs. I believe they will only raid the 4,544 level on Monday market open, making it a buying opportunity to sell 100 points higher. However, if ES/SPX is to dump significantly to under 4,500 again, it stands to reason that the real target is the 4,800 ATH somewhere early in August. But I think, for a lot of reasons, this is just so less likely. Thus, SPX is likely to raid 4,544, which is to say the 4,550 psychological level, and trade over the 4,650 psychological level before Jerome Powell starts yapping. This FOMC is really significant because there isn't another rate hike until September, the end of Q3. So the trade is to long 4,540, sell it allllll at 4,650, and the target is under where JPM went long on puts and has been under water all month under 4,200 heading into the end of August and middle of September.
CME_MINI:ES1!Short
by LordWrymouth
7/26: Daily Recap, Outlook, and Trading PlanRecap In the last week, ES built a sideways base after a steep rally, forming a new chart pattern between 4590s and 4560s. Yesterday, we saw a breakout and a continued upward trend. This pattern was a triangle with a bullish breakout bias, which broke out this morning at 4590, starting a push higher. However, there is concern as the breakout occurred before the FOMC meeting, adding risk to those in the breakout move. Markets Overnight 🌏 Asia: Mixed 🌍 Europe: Down a lot 🌎 US Index Futures: Down slightly 🛢 Crude Oil: Down 💵 Dollar: Down slightly 🧐 Yields: Down 🔮 Crypto: Down slightly World Headlines FOMC rate statement later today and ECB tomorrow. Key Structures The green triangle pattern broke out yesterday, with support now at 4564 and resistance around 4580. The light blue channel resistance broke out on July 13th and is now a key support at 4540. The major June/July resistance is at 4486-93, and the large rising uptrend channel in white has support currently at 4390 with resistance at 4635. Support Levels Supports are at 4593-95, 4580-84, 4572, 4565, 4560, 4555, 4542-44, 4537, 4525, 4515, 4493, 4486, 4474, 4462, 4453, 4448, 4442, 4430-35, 4425, 4414, 4408, 4402, and 4389-93. Resistance Levels Resistances are at 4603, 4608, 4612-14, 4624, 4635, 4650-53, 4665-70, 4683, 4694, 4700-03, 4709, 4725, and 4740. Trading Plan Today's trading plan will be light, perhaps not trading at all unless an A+ setup is seen. The core task for bulls will be to maintain the triangle breakout, particularly the triangle support at 4565. If a deeper sell is seen, 4545 is the final support before a deep leg down to 4490s. Wrap Up Heading into the FOMC meeting, it's important to note that these days are often filled with traps and are generally unpredictable. The best approach is to react to the market, not try to predict it. It's also crucial to size down and avoid gambling in the post-FOMC noise. Today, it will be important for bulls to hold 4565 on any FOMC flushes down. Disclosure: This is not financial advice and is for informational purposes only. Please consult a professional financial advisor before making any investment decisions.
CME_MINI:ES1!
by spytradingpro
7/25: Daily Recap, Outlook, and Trading PlanRecap In my last newsletter, I predicted a bounce from 4564 back to 4580-90, and this played out perfectly yesterday. ES has now put in 5 daily candles stacked side by side, suggesting a large move is incoming. We are now consolidating for the next big move, with the FOMC on Wednesday being a potential catalyst. Markets Overnight 🌏 Asia: Mostly up, China up strongly 🌍 Europe: Up a bit 🌎 US Index Futures: Mixed 🛢 Crude Oil: Down a bit 💵 Dollar: Up slightly 🧐 Yields: Up 🔮 Crypto: Down slightly World Headlines China’s Politburo vows to “adjust and optimize policies in a timely manner” and increase stimulus to jump start economic recovery. Russia attacks Ukraine grain export infrastructure and ports. Key Structures The pattern forming now looks like a rough triangle, with 4560-62 support, and 4590-92 resistance. Some core big picture structures and levels I am watching now include 4590-92, 4560-62, 4539, and 4493-97. Support Levels Supports are: 4583, 4572 (major), 4560-62 (major), 4548, 4539 (major), 4529, 4523, 4516, 4505, 4493 (major), 4487, 4476 (major), 4460-63, 4448-50 (major), 4441, 4433 (major), 4418 (major). Resistance Levels Resistances are: 4593-95 (major), 4604 (major), 4616, 4629 (major), 4640, 4655, 4667 (major), 4676 (major), 4683, 4694, 4703 (major). Trading Plan Currently, I am still holding my 10% long runner. With today being a pre-FOMC day, I would not be surprised to see very complex, difficult bi-directional chop. The key supports today to watch are 4572 and 4560-62. If we do get the breakout, I would not be surprised if we run to 4630 before any micro-dip. Wrap Up In summary, we remain in complex chop and this should be the case until FOMC on Wednesday. This will be a level to level traders market. I see 4590-4560 as being pure chop. Ideally, we can sell to test 4572ish, perhaps bounce there back up the levels and continue filling out the above-mentioned range and triangle until FOMC, which would favor a bullish breakout. If 4560 fails, its short to 4539. Disclosure: This is not financial advice and is for informational purposes only. Please consult a professional financial advisor before making any investment decisions.
CME_MINI:ES1!
by spytradingpro
7/21-7/24: Weekend Recap, Outlook, and Trading PlanRecap Over the past 1.5 weeks, we've seen a significant long trade from 4420 on June 10th to 4585 this week, thanks to the market’s 8 straight days of higher highs with nearly no pullback. However, on Thursday, we lost the first major support in 1.5 weeks, triggering the first short in the same time period for ~30 points, before bouncing. We're now in what I call post-trend conditions, and it's time for complex, corrective action. The Markets Overnight 🌏 Asia: Down 🌍 Europe: Down a bit 🌎 US Index Futures: Up slightly 🛢 Crude Oil: Up 💵 Dollar: Up slightly 🧐 Yields: Down 🔮 Crypto: Down World Headlines G20 Energy Transitions Working Group Meeting in Goa India ends without agreement on phasing out fossil fuels. Key Structures Some core big picture structures and levels I am watching now include 4590-93, 4533-37, 4493-97, and the large rising uptrend channel in white. These structures drive the broad trend and provide context and orientation to the daily price action. Support Levels Supports are: 4564, 4552 (major), 4545, 4533-37 (major), 4523, 4516, 4497-93 (major), 4487, 4467-70 (major), 4454 (major), 4441, 4431 (major), 4420, 4408 (major). Resistance Levels Resistances are: 4572 (major), 4482, 4490-93 (major), 4603 (major), 4619, 4627 (major), 4640, 4650-55 (major), 4664, 4672(major), 4680, 4691, 4700-05 (major). Trading Plan For today, I’ll be focusing on pure reaction at the levels. If I had to provide a coin toss guess, I’d like to see something like bounce from 4564 back to 4580-90, perhaps dip then 4533-37, but we could easily sell to 4533-37 there directly. I’ll trade whatever path it takes. Wrap Up We're now in complex, corrective action after a 190 point rally. Days like Thursday and Friday will be the norm, and they will punish those who are trying to “predict”. Take it level to level, one move at a time. After a big trend move, I am always on the lookout for the early stages of classical chart pattern formation on the 4hr chart. When do choppy conditions end and trend conditions resume? When a pattern forms and breaks out. Disclosure: This is not financial advice and is for informational purposes only. Please consult a professional financial advisor before making any investment decisions.
CME_MINI:ES1!
by spytradingpro
7/20: Daily Recap, Outlook, and Trading PlanRecap For the first time in years, the market has seen two continuous trades without stop outs. Long 4420 on July 9th, with a trailing stop kicking me out last Friday at 4538 (trade 1, 113 points). Then this week, long 4533 on Monday, with trailing stop still going for 70 points, making these the best trades of 2023 by a very large margin. The Markets Overnight 🌏 Asia: Down 🌍 Europe: Up a bit 🌎 US Index Futures: Mixed 🛢 Crude Oil: Up a bit 💵 Dollar: Up slightly 🧐 Yields: Up 🔮 Crypto: Up World Headline Negative reaction to Telsa and Netflix putting pressure on investor optimism after a solid start to earnings season. Key Structures The success of these trades were due to simple, widely accessible technical analysis: A 3 week ascending triangle which tested support last Wednesday, broke out Thursday, then ran to its measured move target. A structure based trailing stop system that kept me in the trade. Support Levels Some core big picture structures and levels I am watching now (from highest to lowest) are 4588, 4532, 4493. Resistance Levels The large rising uptrend channel in white. This connects the March lows and the May lows is the primary medium term channel. Support is currently 4370 and the most immediate resistance line is 4617 now (with 5000+ being the upper rail and ultimate long-term magnet as long as the channel is play). Trading Plan My plan is to hold my 25% runner from this morning as it has not clipped 4613-14 next target up yet for a profit take. I am more cautious with longs now, sizing them smaller, as we are up in a strong resistance zone and these “elevated” conditions are my absolute least favorite to trade, with little comparison. Wrap Up While this phase of the trend will end with a multi-week period of complex chop and correction, it is important to remain focused on the core big picture structures and levels that drive the broad trend, and provide context and orientation to the daily price action. These are not meant to be “predictive” and I will be trading the levels in the below plan level to level, one move at a time. Disclosure: This is not financial advice and is for informational purposes only. Please consult a professional financial advisor before making any investment decisions.
CME_MINI:ES1!
by spytradingpro
7/17: Daily Recap, Outlook, and Trading PlanRecap Last week was a remarkable week, with the market dictating an exceptional, uninterrupted position from Sunday until late Friday. This steep uptrend was triggered by a perfect, 3-week ascending triangle, starting at 4420, with a 4485 breakout level and a 4575 target. This move was extreme and euphoric, with risks attached. The ability to draw lines, tune out noise, and stick to a disciplined trade management process was key in navigating this move. The Markets Overnight 🌏 Asia: Down 🌍 Europe: Down 🌎 US Index Futures: Down a bit 🛢 Crude Oil: Down 💵 Dollar: Flat 🧐 Yields: Down slightly 🔮 Crypto: Down a bit World Headline Russia pulls out of Black Sea grain deal, wheat futures surge. Key Structures The major June/July resistance and the ascending triangle structure in purple are key structures to watch. The breakout point which is the zone between 4493 and 4476 is also crucial. The large rising uptrend channel in white, connecting the March lows and the May lows, is the primary medium term channel. Support Levels Supports are at: 4526 (major), 4515, 4500-4503, 4493-88 (major), 4476 (major), 4469, 4463 (major), 4453, 4448-44 (major), 4434-31 (major), 4424, 4414 (major), 4404-07, 4493 (major), 4387, 4383 (major), 4374, 4366, 4350-55 (major). Resistance Levels Resistances are at: 4537-43 (major), 4556, 4569-72, 4583-85 (major), 4593, 4600-05 (major), 4613, 4620-25 (major), 4637, 4645 (major), 4651, 4663, 4672 (major). Trading Plan In terms of trade plan, the first support cluster down on today is 4526 with 4515 just below and fail of this zone likely triggers a deeper sell back to 4493. A deep sell down to 4493-88 as well as 4476 would be levels to consider a direct bid. For those who do like risky trades, the 4583-85 levels as well as the 4600-05 levels would be spots to look for sell reactions. Wrap Up The week just ended saw one of the strongest trend moves in years. It is expected that the market may see tactical, possibly corrective action today. After an easy week of runners paying out, it will likely be back to level to level trading for a period. As always, the plan is to be purely reactive and let the price set back up again. No forecasting, no predicting. We could test that 4526, perhaps 4515 cluster, try a good bounce back to 4556 from here then do more consolidation/pullback. 4526 fails, we sell down to 4490s. Disclosure: This is not financial advice and is for informational purposes only. Please consult a professional financial advisor before making any investment decisions.
CME_MINI:ES1!
by spytradingpro
7/14: Daily Recap, Outlook, and Trading PlanRecap This week was another successful one for classical technical analysis traders. The week's movements were driven by a simple, textbook ascending triangle structure, which I have been discussing since Friday. I took a long position from 4420, which is now up over 100 points. This entry point was chosen due to its support of the large triangle structure. The resistance was at 4480-90, and ES went parabolic on Wednesday post-CPI on the breakout of that structure. This strong run from 4420 has been characterized by rare price action, with ES not closing a single 4hr candle below its prior candle's low since Sunday overnight. The Markets Overnight 🌏 Asia: Mostly up a bit 🌍 Europe: Up 🌎 US Index Futures: Up slightly 🛢 Crude Oil: Down slightly 💵 Dollar: Up slightly 🧐 Yields: Up 🔮 Crypto: Down World Headline China promises more stimulus and attempts to woo foreign investors. Key Structures 4478 and 4493: This represents the major June/July resistance and is the resistance of the ascending triangle structure. 4456: This back-tests where we broke out late Tuesday. 4440: This is support of the purple ascending triangle. The large rising uptrend channel in white: This connects the March lows and the May lows is the primary medium term channel. Support Levels The support levels for today are: 4540 (major), 4532, 4526-23 (major), 4510, 4497, 4493 (major), 4486, 4478 (major), 4461, 4456 (major), 4448, 4437-4442 (major), 4431, 4424, 4414 (major), 4402 (major), 4393, 4383 (major) Resistance Levels The resistance levels for today are: 4547 (major), 4559, 4571 (major), 4577-80 (major), 4595-4600 (major), 4613, 4620 (major), 4627, 4640-45 (major), 4655, 4680 (major) Trading Plan Today, I will likely not take any new entries unless we get a real sharp multi-level selloff to some buyable supports. The first support down from here is 4540. I'd prefer to see the 4526-23 level tested which has a marginally larger chance of holding for any bids. If we fail there, I'd definitely be interested in buying the triangle back-test which is currently the 4493 level. Wrap Up In summary, it's been an incredible leg up and I'll just be taking it light today and focused on protecting my profits. We are at risk now of a consolidation or corrective period. My loose lean is that ES could dip to 4523-26 lowest, perhaps consolidate more, then continue the leg up to 4559 then onto high 4570s ultimate target. If 4523 fails, we do the 4493 backtest. Disclosure: This is not financial advice and is for informational purposes only. Please consult a professional financial advisor before making any investment decisions.
CME_MINI:ES1!
by spytradingpro
7/13: Daily Recap, Outlook, and Trading PlanRecap In last week's newsletter, we highlighted the rally from 4420 to 4500+ as one of the biggest point moves of 2023. The market had built a classic ascending triangle pattern with 4420 support and 4490ish resistance. This week, the market dipped to 4420 support, ran to triangle resistance at 4490 before the CPI release, and then broke out yesterday, squeezing the market. The breakout led to a multi-week chart pattern, indicating higher targets for the future. The Markets Overnight 🌏 Asia: Up strongly 🌍 Europe: Up 🌎 US Index Futures: Up 🛢 Crude Oil: Down slightly 💵 Dollar: Down 🧐 Yields: Down 🔮 Crypto: Up World Headline Falling inflation spurs global rally. Key Structures The major structures to watch include the ascending triangle pattern with 4420 support and 4490ish resistance. We have already seen a breakout from this pattern. The next important structure is the large rising uptrend channel connecting the March lows and May lows. The support is currently at 4350 and resistance at 4575. Support Levels 4506, 4494, 4479, 4464, 4448-50, 4441, 4432, 4424, 4416, 4400-4405, 4393, 4380-82, 4369, 4345-50, 4337, 4326, 4317, 4305, and 4290 Resistance Levels 4520-25, 4534, 4543-45, 4565, 4570-75, 4585, 4592, 4601-03, 4615, 4635, and 4649 Trading Plan Today, the bull case is in play above the breakout. If we see any dips, 4479 would be the lowest point for bulls. As long as we are above the ascending triangle breakout, the bull case could see us base between 4493 and 4525 before moving up to 4534, 4545, and then 4570-75. The bear case begins when the breakout fails. The first warning would be the failure of 4493. If we see a bounce here and deep acceptance of the level, 4490 may be a spot to try for the scalp down. Wrap Up We have seen a significant breakout and now the market needs to defend this breakout. Although we have rallied straight from 4420 with only tight sideways consolidations, it wouldn't be surprising to see the market build a base between 4520 and 4494. If the market remains strong, we may not even lose 4506. However, if we fall below 4493, we may see a sell-off. Disclosure: This is not financial advice and is for informational purposes only. Please consult a professional financial advisor before making any investment decisions.
CME_MINI:ES1!
by spytradingpro
Nasdaq - The Great Bear TrapIn recent analysis on the state of the markets, I note that the notion that we're "in a bull market" is actually really dangerous, and how, if you really want to see healthy markets into the future, you don't want to see a new all time high print yet, because we're just too far over the trend: Nasdaq NQ - A Fundamental and Technical Warning Signal Moreover, Q2 just finished strong, and with a new quarter, comes a new deployment of the algorithms. The infamous "JPM Collar" is something I discussed in a recent post: SPX/ES - An Analysis Of The 'JPM Collar' Namely that I believe it forecasts a serious correction in the markets. But at the same time, it has until September to even start, really. And it's dangerous to be long right now because the VIX is so low and we've been in a bullish impulse inside of bearish market conditions for so long, which I note below VIX - The 72-Handle Prelude You can see the first manifestation of this principle has begun in both the VIX, and the UVIX 2x leveraged bull ETF: You might look at that and think "lol it gave all its gains back" but this is actually what you want to see if it's going to run a bit. I also have open calls for Tesla, which are short term, albeit significantly, bearish. Tesla - What To Expect Until September? And an open call on Netflix where I actually believe it will retrace to the $170s during the next major correction. Netflix - I Hope You Like Catching Knives So where we're at with Nasdaq futures is that it made lower highs while the SPX made higher highs: The divergence is noise for the short term, but if you ask me, it means that in the long term, if we see a dump, and then a bounce, that Nasdaq will actually take out the high while SPX will be a laggard. What Friday's price action showed is that both SPX and Nasdaq have begun to dump. If you ask me, this is because before we can go higher, we must go lower. Sells have to be matched with buys and buys have to be matched with sells, after all. And at this point, we haven't seen any downside in the markets since March. It's too extreme. Two important areas of note is we have the daily pivot around 14,800 and the gap around 14,500. Both of these are places that I expect to see attempts at bounces that will not come to fruition. Because you need to give people a chance to buy the dip and then for them to get stopped out. I believe that the reason things will dump, and they may dump violently, and fast, is to crank the VIX and have all the permabears finally see their "opportunity" emerge to get short for "the crash." Only for markets to bounce through the end of August while everyone with money is at the sea side and VIX dies a slow death back to a 9-handle while volatility gets sold off for free money again. By then, nobody will want to be short anymore. Everyone will have capitulated. Then the fireworks can start, and early bears will miss the move, much to their consternation. So, I believe that Nasdaq and tech stocks give the opportunity to short through the next few weeks. On Wednesday, we have CPI, which has not mattered in months, but may matter a lot now while the markets pretend to care about whether the Fed hikes rates again. Then we have FOMC on July 25 and a Nasdaq 100 "rebalance" on the 24th. A recovery through the end of July and all the way through the end of August is a very likely scenario. Until then, I believe we will see violent and significant downside, and it finally gives an opportunity trade puts and bear ETFs until you see really significant bullish movement in price at key levels, and then look for longs. But the next time it's time to go long, it's only a scalp. After Q3, the remainder of 2023 and the early part of 2024 is likely to be quite dangerous. There are more important things in life than making money. Make sure you take good care of yourselves and your family and friends. Make sure you make up for your regrets as soon as possible, lest you find yourself with no further chances to set right what was set wrong.
CME_MINI:NQ1!
by LordWrymouth
1