Market Analysis and Trades for 2/2
If you are looking to join the Discord (now separate from the newsletter) please see here: JOIN THE DISCORD Please email help@pharmdcapital.com if there are any technical issues. Plans/levels will be posted in the Discord so the Discord option includes Substack content but a new Substack subscription does not include Discord access.
Be sure you have read the Starter Kit, including the free section even if you’re a paid subscriber. Trading Doggy Style Starter Kit
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 2/1
Friday was a great example of the importance of being able to adapt to the type of session which presents. During the overnight session, the plan worked extremely well. We were looking to be long if 6969-6973.5 held, targeting 6991-6994, and we were looking to be short below 6969-6973.5 which had potential for 6922-6925 (and completed).
Note how clean the overnight session traded:
However, when the cash session opened it was anything but clean as there was a significant battle for 6969-6973.5 and the analogous spot on NQ. From 9:54 EST in the Discord:
In the end it indeed turned out that ES was lying, but not before a look below and fail of the IB low (a great long) AND a look above and fail of the IB high (a great short). The presence of the broadening formation set the tone for how we would trade the day, specifically looking for the potential to make new high of day off the LBAF the IB low, and then potentially be a short back down. This played out and finally resulted in sellers cleanly defending 69-73.5 from below and the targets from the plan being met.
This was a great example of where traders can get into trouble overtrading the open. I like to use a Texas Hold ‘EM analogy. As each successive community card is revealed, we gain more information about our opponent’s potential holdings. If we are the best player at the table, it makes no sense for us to put all of our money on the line before some of the community cards are revealed. It makes sense to wait for more information, as our advantage is our ability to process that information correctly. Trading the open is like committing all your chips pre-flop. It makes no sense if you have an edge. It is far better to wait for additional information to be presented, analyze that information, and then press your edge. Identifying the broadening formation early gave us the edge needed to take the long on the LBAF the IB low, take aggressive profit on longs into the IB high, and consider shorts on a nominal new high.
Paid Content Below or in the Discord