Market Analysis and Trades for 6/3
Turnaround Tuesday or TACO Tuesday?
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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 was to fade any attempt at range expansion that failed. Value for last week was an extremely narrow range and all week we saw attempts to extend range in both directions that were rejected. We gapped down overnight, so that meant looking for longs.
We used 5885-5893 as defining the bottom of last week’s value, and 5936-5940 to define the top. Thus, we expect rotational trading within that range and look to fade the failed excursions outside that range. The idea is to identify areas which might trigger an upside reversal from below 5885-5893 or a downside reversal from above 5936-5940. The major target is 5915 and then the other side of the range.
Sellers were able to grind through 5885-5893 during Asia and into Europe, with low of night being put in at the 5865-5871 range identified in the plan. This triggered a reclaim of 5885-5893 and resolved to the 5915 target at open. I was frankly surprised, though pleased, to have a second opportunity to get long in this area. Any inability from sellers to gain traction through an overnight low can trigger a long. The fact the overnight low was left there meant that a look below and fail or hold of the overnight low was a session long setup:
Once 5915 was finally bid from above we saw resolution to 5936-5940 the major upside target for the trade.
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