Market Analysis and Trades for 6/13

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The weekly post for SPY 0.00%↑ and QQQ 0.00%↑ should be reviewed prior to this. Link to Market Analysis for The Week Ahead

The plan for today if we traded lower first was effectively to monitor for any inability from sellers to gain traction below 6004-6008 and 5987.5 and get long if they failed to do so. 5987.5 was the 3-week breakout level and we have been watching it all week. The overnight session traded 5987.75, 6004-6008 was reclaimed before open and held at open (6008.5 low), and the short covering rally was on. Yesterday may have looked bearish, but I cautioned against getting bearish too quickly as no damage had been done to the weekly profile. We saw the same thing last week and the Thursday sell led to a snap back rally like today.

Note the cash hours low on NQ was 21818.5. On a cash hours basis it wasn’t even close.

Today was an inside day. Objectively the trade here is to go with a break (with continuation) of the inside day in either direction and to fade the failed breaks. We will have areas of interest to potentially front run such a break. I did notice a familiar pattern in today’s action that I am monitoring closely. The last time I saw this pattern we put in a meaningful top within a few days (but traded higher first). I will need to monitor this likely through Tuesday but it has me even more cautious on rips than usual, but still expect responsive buying on dips until my minimum criteria for trend change are met.

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