Market Analysis and Trades for 5/9
Swing High will Confirm or Negate Tomorrow
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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
Yesterday was all about the look below and fail of the box, a trade which generally targets the top of the box (5724.75). Sellers would have had to defend 5654-5656.5 and drive to new lows to negate the LBAF, but we once again got news overnight that pretty much sealed the fate of sellers. This prior strong resistance turned into support at today’s cash lows and provided a fantastic long.
The IB low was set at 5659 just above this key (and presumed strong) 54-56.5 spot. This made it an A+ long in the same way we described a LBAF of the IB low last week when it sat above a key spot.
I was personally targeting 5682, 5698 and 5720 where I would convert part of my last contract to micros to run:
One of the benefits of this conversion trade is that it frees up my primary vehicle (ES) to trade either direction. I exercised this option at ES 5740.25 at 12:54 EST where I went short while holding the small micro long runners. That way if I am stopped on my ES short and we rip higher I’ve given back a few handles, but the long runners continue to run.
I still hold a small piece of that ES short and I still hold a few micros long from 5656. Tomorrow will likely confirm or negate today as being a significant swing high. My positioning is prepared for either, and then plan will either be to press short or press long depending on
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