Market Analysis and Trades for 5/6
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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
In the weekly plan (above the paywall) the critical nature of this area on both ES and SPX was discussed. We saw a bearish overnight session take out Friday’s low, but as is often the case in a bullish trend, the dip was bought.
In spite of the rally, we saw a gap fill reversal on ES (the 4pm close) while leaving an ETH gap open (5pm) and the SPX 5/2 close untouched. In the Discord and on X I called for the potential for balance here absent a bullish engulfing day, which would lead me to think that ES 5630s was in play in the short term
We may or may not see 5630s ES tomorrow but if so, it provides an interesting setup for both bulls and bears into and out of FOMC. Until FOMC we can expect 2-way trading within a range. Seeing where that range is likely to develop ahead of time can guide us in our trading decisions, but to me those trades are just biding time until a larger move comes once price leaves that range.
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