Market Analysis and Trades for 5/13
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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
This past weekend was obviously a binary event. Futures opened on a large gap up, held the top of the 7-day balance from above, and that was that. The open was sold initially as profit taking is to be expected. Often on such large gap ups I will wait for the IB to set (see the starter kit). The overnight profile left an absolutely enormous set of single prints ranging from roughly 5771 to 5813 and the IB low ended up at 5814.5, providing an excellent long setup. Single prints are very likely to be reactive which could produce a look below and fail of the IB low. I happened to spot some decent absorption into the low and decided to front run the reclaim. This is a bit aggressive but if I see what I’m looking for I’ll do so and tighten my reward/risk.
I entered long at the 10:35 short time frame higher low at 5810.5 and 5810.75. The long ended up resolving for more than 65 handles, though I closed just under 40 to tend to some family matters.
My focus has been on day trades as of late given how wild the news cycle has been lately. I’m much more willing to swing futures runners that are deeply green but was disinclined to do so tonight. This is a futures trader’s market in my opinion. We have CPI tomorrow with equities extremely overbought and bonds getting a bit crushed. I believe if the bond market remains under pressure that it will (ultimately) matter for equities. A soft CPI should be supportive to continuation of this rally, whereas a hotter than expected CPI could put it at risk. In tonight’s plan we will discuss upside targets along with what kind of downside move could prove problematic for bulls.
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