Market Analysis and Trades for 2/6/25
Deja Vu
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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
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I pointed out during premarket in the Discord and on X that, while we have gapped down twice on Sunday nights into the morning, buyers have fully controlled every cash session since January 13th as crazy as that man seem. During cash hours, we have not taken out a prior day low.
That continued today:
Aside from that, a common theme that we have discussed for much of the past year has continued to play out: “When bearish setups do not produce bearish results, buyers are to be considered strong and sellers weak.”
We saw that twice today including the overnight. Sellers had an opportunity to force a liquidation by trapping bulls below 6037-6039. This played out overnight and frankly there was no sign of a liquidation. Price continued to drop to nearly (but not quite which is notable) yesterday’s 6018 low, but it appeared that the dip was bought all the way down.
Intraday sellers had a chance as well served only to trap themselves below 37-39 into the overnight VAL. Further, a fresh intraday bearish setup played out, a look above and fail of the IB high. This did nothing more than produce a higher low and the IB high was ultimately broken. This, along with look above and fail of prior day or prior week high are generally bearish setups. For much of the last year and especially since August we have seen these setups produce little for sellers.
Until any of this changes, longs should be favored and the only question is where/when to buy the dip. I would pay very close attention for when any of the above DOES change as it will mark a notable change in character.