Market Analysis and Trades for 5/5
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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
After earnings were received relatively poorly on Thursday, ES still held the key 5596.75-5600.25 spot at the low (5601 overnight low) and then saw an enormous (yet very thin) rally on frankly the same “US and China might talk” headline we’ve seen countless times in the last two weeks. This rally stalled just below the weekly 5675-5680 spot and Thursday’s high, but held a pullback low at the daily 5633-5636.5 level. After some consolidation into NFP, the report was really quite good, and ES nearly made it to the major weekly 5702-5706 spot before an inventory correction (pullback) was needed into and at the open. The weekly 5675-5680 spot was not initially controlled, but the daily 5663.5666.75 spot (prior resistance) was quite strong and triggered a move directly to 5702-5706. A higher low (I’ll share the trade setup below) led to a break of 5702-5706 for the major 5720-5723.5 weekly level (they’re getting closer together up here as we have some stiff resistance).
In the case of Friday, a back test of the open from above was a decent setup and the look below and fail 30 made it even more powerful
Notice how it took out this (circled in yellow) “higher low” before ripping higher. Higher low is in quotes because it was not a structural higher low on the 5. This was a good opportunity to join the uptrend if the long at the 5663-5666.75 level was missed
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