Market Analysis and Trades for 6/4
Sniffing out a Failed Breakout vs a Trap
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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 last 24 hours were somewhat bizarre. We closed yesterday on an extremely strong profile, yet sold off straight through most of it overnight until 4am. At that point an absolutely non-stop bid came in the cash session opened essentially unchanged. The plan for the day ended up being perfect but in the most absurd manner possible.
If you look at a cash hours only chart it looks rather straightforward. We held 5938.25 at low of day (the massive bid 38-40 from yesterday), tested and ultimately cleared 56-59, tested and cleared 74.5-77.5, and proceeded to the 3-week balance high of 5987.5.
Here is the all hours chart. As futures trader it can sometimes be difficult to completely ignore the overnight session and last night was a weird one.
Regardless, we tested the 3-week RTH balance high on ES. We did not close above it, but we did close right at the SPX 3-week balance high. We have ADP in the morning and a sustained vs a failed breakout has major implications for the next directional move. There are a couple of trap spots
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