COPY with No Paywall- Market Analysis and Trades for 3/31
The Setup for a Swing Low
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The weekly post for SPY 0.00%↑ and QQQ 0.00%↑ should be reviewed prior to this. It can be found here Market Analysis for the Week of 3/29
After yet another Sunday night gap down, we got yet another Sunday night rally. This time, however, the rally was stepped on at open. There was no lack of clarity at the open and NQ and ES were never able to reclaim their key levels. This sounds bearish, but to me the last few weeks floating up through Tuesday was actually more bearish than this. We saw some good buying at a key area today and even though we saw continuation lower, I am starting to see early signs of a change in character. There is a setup for tomorrow (or possibly later this week) which could produce a swing low.
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Levels - Note not all weekly levels will be used each day but they could all present as part of an “active sequence” within a given day(s). Make sure you have added the levels from the weekly plan to your chart
Grab the PharmD_KS indicator linked in the weekly plan or in the dedicated discord room if you haven’t.
Mark each day’s RTH high and low on your own chart each day. I generally won’t include in the levels
ES levels to add/keep/change for the daily levels section
None
Make sure you keep Friday’s RTH low on your chart as it was last week’s low along with today’s high and low
NQ Levels to add/keep/change for the daily levels section
None
Make sure you keep Friday’s RTH low on your chart as it was last week’s low along with today’s high and low
COMMENTARY
After the Sunday night gap down turned into a cover rally, the question was whether or not the pattern from the last few weeks would continue with a rally into Tuesday for a lower high. This time what should happen did happen, and the large inside gap up was sold hard. This had and has me far more interested in longs this week than if we had continued in the same pattern as the last few weeks. I believe this week is setting up for an absolute monster trade potentially in either direction (or both would be even better).
We got a liquidation break at open and there was meaningful interest from buyers around Friday’s spike base and low. We did eventually get a significant break lower so the daily continued to frame lower, but this was the first real buying interest I’ve seen. On top of that, there was a lot of voluntary covering overnight early (later some Involuntary covering lol) and we saw a very large exit from a big short at the low. A number of names are at major support. I must objectively state that sellers are in full control, but I am interested on the long side and added back a tad of my long exposure at the low along with monetizing a bunch of hedges. I still have runners on those hedges to hold against the newly added exposure so I can afford to give it a bit of wiggle room if we proceed to the yearly level waiting below.
PRICE:
ES:
The most important level for now is without a doubt 6412.5-6416. Today’s IB low (and eventual breakdown level) sat in that range as did Friday’s spike base. I tend to like the composite profile inclusive of the overnight action to evaluate things in this case (a rarity for me) and as of now this is a potential double distribution profile with separation of those distributions in the 12.5-16 range.
Trading Lower:
Holding below 6412.5-6416 (inclusive of a LAAF which would be a short) is objectively bearish consolidation for a retest of today’s low.
I am VERY much on watch for a LBAF of today’s low with the major 53-57 sitting just below. While it is hard to project without seeing tonight’s profile, I believe it has a very fair chance to see 6412.5-6416. We would need to be mindful of the weekly 6375-6783 but my lean is that this is a weekly level that will be filled in with volume and be rendered nearly useless this week (I’ve said before there is almost one weekly level each week that does this and it isn’t a coincidence). The scenario I mentioned as being preferred in the last 40 seconds of the weekly video was Monday red, Tuesday hammer candle. Again, I’m not predicting it, but I hope to have teased market makers sufficiently between the video and tonight’s plan to make it happen.
Continuation through today’s low speaks for itself and we just monitor the levels to the downside in continued search of the next yearly level.
Trading Higher:
Holding above 6412.5-6416 (be VERY careful a failed reclaim/LAAF) should see at least 34, probably 41, and with potential for 51-54 again and today’s high. If today’s high is taken out, then the daily would be brough to balance.
NQ:
NQ has single prints 254-262 but the weekly 269-280 is close enough to use tomorrow and there is some supply in that range anyway. I would want a firm reclaim of 269-280 which includes Friday’s (and last week’s) low anyway.
Trading Lower:
Holding below 269-280 is objectively bearish consolidation, even more so than for ES as it contains last week’s low. Today’s low was captured by the 025-045 range, and the overnight low was captured by the 085-096 range. We’ll need to be mindful of the 146-162 range as well.
Like for ES, I am very much on watch for a LBAF of today’s low as NQ is still in some demand mentioned in the weekly plan. The path back to 269-280 may be less clean than the ES path back to 6412.5-6416 but if ES and NQ are aligned it probably still makes it there.
Continuation through today’s low speaks for itself and we just monitor the levels to the downside in continued search of the next yearly level.
Trading Higher:
Holding above 269-280 (be VERY careful a failed reclaim/LAAF) should see at least 330, and probably 360 if not a proper test of the 369-377 level. If today’s high is taken out, then the daily would be brough to balance. I would be cautious anywhere near the 409-440 level (down to 400 or so) as bulls learned today.
TRADES:
I’m going to call out the long opportunity, not because I have 100% certainty that it plays out, but because I know a lot of you are antsy to get long and this is the safest way to do so.
As per the above, a LBAF of today’s low that ends in a hammer candle is one way this can reverse from here or near here. We also could end up forming much more than a 3-day balance down here. I add this because very often what happens is we take that first shot (let’s say tomorrow) but the trade invalidates only to later form the bottom of a box very near that original entry. I personally try to avoid pressing for a trade that isn’t there, but I’m also willing to keep my eyes on things to potentially try more than once. In fact, I hope we see a float up tonight that leads to a short. I would like to take this short and hold at least a thin runner just in case I DO try to take a meaningful long on some kind of LBAF setup or similar. This is a backward ass way to end up #hedged #puru #blessed life (an inside joke only 69% of you understand). This way if your long doesn’t work you’ve made money on a short and can just hold or monetize your runner(s).
ES:
Long a LBAF of today’s low. While this is perhaps premature, I do have reason to believe this can produce a swing low. Sellers are in full control, so it either works, or it doesn’t, there is no reason to hold a bag.
Short a fail/LAAF of 6412.5-6416. This is the best pure setup out there and is an A+
NQ:
Long a LBAF of today’s low. While this is perhaps premature, I do have reason to believe this can produce a swing low. Sellers are in full control so it either works or it doesn’t, there is no reason to hold a bag.
Short a fail/LAAF of 269-280. This is the best pure setup out there and is an A+
I honestly have no interest in anything else in terms of planned trade. We could trade higher and still fail above the major “pivots” at the areas outlined in the weekly plan and above but sellers would need back below 269-280 and 12.5-16 to reassert control anyway. I believe we can see two-way trading between today’s low and the major “pivots” for ES and NQ. Sellers are favored, but if session trend aligns with your bias trading either way is fine.