Market Analysis and Trades for 12/18
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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 12/14
Yesterday we identified some short-term balance, though with sellers still firmly in control. Any time there is short term balance it could go either way, but in this case it has been incumbent on buyers to prove themselves.
The 25440-25448 range on NQ was projected as forming an “upper edge” for this temporary balance (short failures from buyers at an upper edge and long failures from sellers at lower edges). That played into the NQ trade setup which had potential for a bearish engulfing day which it did and more. The cash hours high was 25447.75 after failing the strong weekly level just above during premarket
For ES the setup was similar in that a weekly level was sitting just above yesterday’s cash hours high with potential to trigger a look above and fail. This triggered premarket, buyers were unable to reclaim 66.5-69 at open (high of day 71.25 on a brief wick) and it too took out yesterday’s low with continuation.
While there is significant technical damage, we did see some signs that the selling could be a day or two away from being complete in the short term. Regardless, we will focus on the setups and trading with the side in control
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