Market Analysis and Trades for 3/3

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 there is no reason to subscribe to both

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

Friday was a fantastic example of how one can have a plan but must be prepared to quickly pivot when given new information. The plan for Friday was to short pops if we traded higher. I’ve written numerous times about the importance of trading higher first vs lower first in terms of establishing a bias. In the case of Friday, we traded lower first and sellers failed. It wasn’t so much a failure as a voluntary cover. But if size is covering on an initial drive lower, why should I suspect new sellers (clearly late to the game) to be able to make a new low? We also were less interested in shorts much lower as we were approaching the bottom of the effective range on ES. From the plan and from the Discord Friday morning:

The shorts we had planned still worked extremely well but I wasn’t interested and only took a long via ES 5960 calls for Monday. After holding the August swing low AVWAP (white in the first picture now turned green in the picture below) we ultimately saw a massive rally into the close to 5971.

I discussed my impression of this rally in the weekly plan. I expect the next couple of days to be quite difficult to navigate and to manage one’s bias. We will be prepared and be on the right side of the trade as we have been for this entire 3 months of sideways action.

Paid content below and in the Discord.