Market Analysis and Trades for 2/28

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The weekly post and for SPY 0.00%↑ and QQQ 0.00%↑ should be reviewed prior to this. Link to Market Analysis for The Week Ahead

The overnight session floated up after NVDA 0.00%↑ earnings and in my opinion, this was mostly a post event volatility float. I’ve mentioned a number of times recently that the market is primarily concerned with two things right now: the prospects of a recession and prospects of an earnings decline (the two are not unrelated).

This float up took us to the area we were looking to short on both ES and NQ. The ensuing selloff triggered a look below and fail of yesterday’s low on ES which was a long setup which resolved for 45+ handles (NQ offered a couple nice longs as well). However, sellers were able to cap the 5990.5-5994.5 range on ES and 160-171.5 on NQ and trigger the liquidation. From last night’s plan:

As we have come into a major spot, the focus of tonight’s plan will be the bare minimum reclaims buyers need to terminate this sell. I do this the same way that I map out the bear case when price is bullish. In this case, anything less than these reclaims, and we will be firmly short.

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