Market Analysis and Trades for 7/23

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The weekly post for SPY 0.00%↑ and QQQ 0.00%↑ should be reviewed prior to this. It can be found here: Market Analysis for the Week of 7/20

Hopefully the non-paywalled plan for today helped at least a few of you. The trade of the day was certainly the LBAF of Friday’s low. While it was a slow grind, there was nothing but higher lows on the way to the 6353.5-6357 spot. These small ranges are pretty brutal so any time one can scoop 20-30 handles I tend to consider it a good day.

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Levels - Note not all weekly levels will be used each day but they could all present as part of an “active sequence” within a given day(s). Make sure you have added the levels from the weekly plan to your chart

ES levels to add/keep/change for the daily levels section

6338-6340 - it may make more sense to use this instead of the weekly 40.5-42.5 spot for tomorrow

6300-6302 keep

NQ Levels to add/keep/change for the daily levels section

23328.5 might as well keep

23256.25 Monday’s RTH open and today’s afternoon rally high (ARH)

23134-23142

23108-23112 today’s low and the 7/9 high. Monitor for a LBAF with the critical weekly 23090-23097 spot below

COMMENTARY:

Today was a relatively neutral day. Two prior day lows were taken out but buyers ultimately stepped in where they should have and forced a decent close. Here is a visual using SPX to describe where things stand:

We discussed in the weekly plan that Friday’s low was a back test of the prior range break for SPX. Due to contract decay ES traded (both then and today) below 6335.5 which was its prior range high. Therefore, we have a 3-day balance sitting on top of a prior multi-day balance. The top of this 3-day balance is poorly defined as a “box” per se but it is still a 3-day technical balance. We could fill out this range further before deciding, or break this 3-day range directly (either direction).

We have a couple of competing sequences in play here. From a bull’s perspective, a second back test of the prior range was successful. Above today’s high (we’ll use 6353.5-6357 ES) opens a retest of yesterday’s high and new highs.

From a seller’s perspective we currently have a LAAF of last week’s high and have forced (at least temporary) balance just above a prior range break. This isn’t what a range break should look like. Again I temper bearish expectations as this is summer trading ahead of major earnings, FOMC, the Treasury Department’s QRA, the supposed tariff deadline, and Trump likely finding a way to fire Powell shortly after (yes I think he goes for it). We have major tech earnings starting tomorrow. NQ was a bit weak, while RSP 0.00%↑ was quite strong. This makes sense given the massive run up in tech into earnings.

Price:

Below today’s low on ES we have the 6310.5-6315 range to potentially trigger another LBAF but I would still tend to favor resolution to 6292-6294 with anything but a quick LBAF of today’s low. The NQ low is in a very good location to potentially see a LBAF as it sits just above the major weekly 23090-23097 spot. Today’s low was effectively a back test for NQ but I’ll give it to 23090-23097.

Above today’s high on ES (call if 6353.5-6357) and we retest yesterday’s high and I would have to favor new highs.

Within today’s range I see the 6338-6340 spot as key. Holding below that range opens retests of today’s low or at least the 6323.25-6327 spot. Holding above 6338-6340 allows for retests of 6353.5-6357.

NQ, unlike ES, left large A period single prints behind. The afternoon rally high came right to Monday’s RTH open. I would watch for a LAAF of that spot for a short. I generally expect to see 23170s-23180s in that case once back through the 23234-23240 spot.

I would additionally monitor for sellers to present if the 23281-23295 range and possibly just above. Any sell from here would need to trade back below 23256.25 and 23234-23240. As it would represent a lower high I would then see 23134-23142 as likely.

The 23134-23142 spot represents some demand from today which protects today’s low and may produce a long. I wouldn’t bid it directly (especially if NQ fails higher first) but would take it if buyers show up.

Again, today’s NQ low sits just above the massive 23090-23097 spot so I will look for bids at the weekly level to potentially front run a reclaim of today’s low.

I’m going to keep it at that for tonight. I’ll be traveling tomorrow but should have a premarket update. I’ll be back at the desk on Thursday.

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