Market Analysis and Trades for 10/20
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The weekly post for SPY 0.00%↑ and QQQ 0.00%↑ which includes a free video should be reviewed prior to this. Market Analysis for the Week of 10/19
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While the “mother bar problems” were an issue for a number of trading styles, those adept at trading both ways and with the patience to wait for great setups were rewarded handsomely. Though I was out of town, I provided one real time setup in the Discord on Thursday and one on Friday.
On Thursday it was as LAAF of the overnight high targeting the overnight low with runners for continuation. This setup was spotted 20 minutes after the open and played out 50 minutes later:
A second chance (and frankly safer) entry was offered on the back test of the IB high from below (red arrow)
There were very realistic targets WAY “down there”
It was time to cover and consider longs in the 6630-6635 range
Since it came back down I simply had to grab a long and it provided a great real-time example of my “hedging the edge” concept:
People get far too caught up in trading a single direction and with a single instrument. Last week was not the time to do so.
On Friday at 10am I posted I had a suspicion we would come back and make new low of day and then reversal back to the highs. Once the IB was set 30 minutes later, the setup only got better as it would also represent a LBAF of the IB low and target new high of day.
The two posts were at the orange arrows dead in the middle of range: and we can see the LBAF of the IB low did indeed produce new high of day and more:
I personally strive to take ONE trade per day at most. This higher volatility environment and two-way trading have provided amazing opportunities. Those two trades combined for nearly the entire week’s range. Patience and selectivity can make or break a PnL.
Paid Content Below or in the Discord
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.
ES levels to add/keep/change for the daily levels section
6724-6726
6697
6660
NQ Levels to add/keep/change for the daily levels section
24804
COMMENTARY:
Within the context of the weekly plan, Monday has some solid potential. Friday was a bit of an awkward double distribution profile on ES which formed mostly in the last 90 minutes of the day including a VPOC shift into the upper distribution (on ES at least, no VPOC shift for NQ). Pardon my spaghetti chart for the picture:
Friday was also an inside day. So we have an inside day setup, inside of an inside week inception box setup.
Keep in mind how an inside day is played big picture. It is just like the inside week. Sustain above Friday’s high and we can retest Thursday’s open and high, sustain below Friday’s low and we can target Thursday’s low. We can take reversal trades on a LAAF/LBAF. These are the major ideas for Monday.
Inside of Friday’s range we have some decent opportunities as well. We can see from the above picture that Friday’s IB high (97.5 but using 97) roughly separates the upper distribution from the rest of the profile. Hold above 6697 keeps a retest (and potential break) of Friday’s high in play. Any LAAF of Friday’s high would need to get trapped back below 97 to have potential to produce bearish results.
If 6697 is lost and offered, then 6690 (from the weekly plan and last week’s levels) comes into play and likely 6676-6780. I see potential for continuation to 6660 and 6650-6653 per the weekly plan BUT that 5-minute higher low from 1:20 (6665) is staring us in the face. Because of this I tend to be more judicious with covers on shorts until that low is meaningfully violated.
Because of the above referenced short time frame higher low, we can consider looking for longs if sellers can’t get through there (perhaps 6676-6680 holds). Just know that 6697 would need to reclaim and hold from above to negate weakness and trigger a rotation toward Friday’s high.
If sellers cannot get through Friday’s low, whether 6676-6680, 6660, or 6650-6653 holds, then longs are on the table back toward at least 6697. This will require a real time read based on session information.
For NQ the weekly 969-980 is analogous to 6697 on ES. Holding above can retest (and break) Friday’s high. Holding below targets 910-912 from the weekly plan and 869-875. Any LAAF of Fridays high would need to get trapped below 969-980 to produce weakness. The Friday higher low from 1:20 sits at 829 so holds of 869-875 can come back to 910-912 and 969-980.
Losing 869-875 and trading through the 829 low targets 804 and 750-769. Friday’s low and the weekly 651-669 come in to play below there.
Inability to get through Friday’s low (just like ES) can produce longs from any of the spots, we just need to see session information to more credibly plan.
Was a bit rushed at the end so I didn’t/wont have time to rate/grade each trade on its own but I kind of generally like the setups that may present tonight/tomorrow.