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The weekly post and video for SPY 0.00%↑ and QQQ 0.00%↑ should be reviewed prior to this. Link to Market Analysis for The Week Ahead
Be sure you have read the Trading Doggy Style Starter Kit. I will be adding to this over time, likely first focusing on example executions. Trading Doggy Style Starter Kit.
Quite the wild day in the markets yet again. I’ve said repeatedly that 2025 is the year of the day trader, particularly futures traders and today was yet another great example of that.
We had been cautious of the potential for a gap down before the trade war escalations took place on Saturday. The video above the pay wall was mostly a cut from the prior week’s video but the action off the same spot for a third time gave us pause.
After the massive gap down Sunday night, futures had again recovered, but to a lesser extent relative to last week. The opening drive higher was sold quite hard initially and most of us were short the look above and fail of the overnight high (5988.75) taking profit all the way down including a well timed profit take at our 47-52 spot at low of day (nearly a 40 handle short).
Sellers were in control until news of an agreement with Mexico came in and indices ripped higher. It was nearly impossible to catch this as a long unless one was quite quick. Following the rip there was actually a pretty decent offer in the tape, in my opinion passive sellers taking exits. Once above 6002-6012, however, bulls were fully in control. There was some decent selling into the close, then after the bell PLTR 0.00%↑ reported fantastic earnings AND we got good news out of Canada. ES ripped 40 handles higher from the close.
While trading extremely technically big picture, control of the action continues to be heavily news driven. For me that means get a great trade, lock profit, set stops, and avoid overtrading.
Will we once again rip to new highs after a massive gap down, or will sellers see more reason to defend the rest of this week?