Market Analysis and Trades for 5/21
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The weekly post for SPY 0.00%↑ and QQQ 0.00%↑ should be reviewed prior to this. It can be found here Market Analysis for the Week of 5/17
The picture from the weekly plan summed up our preparation for the week:
We were prepared to take last week’s low, very likely see a back test higher, and then apply the decision analysis from the weekly plan to decide bear trap vs bearish continuation. In the meantime, amazing day trades continue to set up and give us opportunities to balloon runners into swings if we so choose.
For today, with the LBAF of last week’s low active, longs were certainly rated more highly. The action overnight was amazing and offered multiple opportunities on both sides. For NQ my assessment was that 28800-28817 was an effective “lower edge.” While below 28859-28880 could have NQ at a bit of risk, my bias was looking for longs on a hold of 800-817 which might trigger a reclaim of 28859-28880. From the commentary and trade setup:
The overnight low held 800-817 (797.25 low), and quickly reclaimed and bid 859-880 for the rest of the night, ultimately resolving for 580 handles to today’s high of today in the 29383-29397 range
ES was a similar picture, with the LBAF of 7360 producing low of night and protecting the LBAF week. I personally preferred the setup on NQ but it worked quite well.
Yesterday’s low was protected twice overnight, producing the LBAF of 7360 and last week’s low (which was already in effect from yesterday’s low). Once 7380 was reclaimed, 7389-7391 and the weekly 7398-7403 came quickly. Once through yesterday’s high it made a run for Monday’s high.
The question we now ask is whether or not the low is in, or if this was just the back test after bringing the weekly timeframe into balance.
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