Market Analysis and Trades for 1/7
On the Verge of (Failed or Legit?) Breakout
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The 2026 Equity Markets Year Ahead can be watched here: 2026 Equity Markets Year Ahead
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 1/4
Today was a rather wild day particularly inclusive of the overnight session. After holding the weekly 6936-6942 ES rallied toward the weekly 60-62, failed just shy as NQ rejected off the weekly 669-674 level and both sold off hard and fast during the European session. All this selloff did was trigger the major long setup (for both) which was a look below and fail of yesterday’s cash hours low.
I had taken a shot short via SPY and QQQ puts yesterday at the high (stop was traction above those highs), and this was the last thing I wanted to see waking up. Trading isn’t about being right or wrong, it is about identifying setups which allow for minimal risk with significant potential upside. This was one of them, and once the long setup played out it was reasonably likely my stop was hitting.
From there ES and NQ simply climbed the weekly levels, though not without some significant back and forth early in the cash session.
SPX made a new all time high today (closing right at it) while ES (due to contract decay) fell just shy. We have major jobs data coming the next three days with ES/SPX/SPY sitting at a crucial decision point technically.
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