Market Analysis and Trades for 7/28

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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 7/27

Friday offered some pretty fantastic 2-way trading including the overnight session, particularly on NQ which was my favored trading vehicle for the day. I had explained in the plan how the NQ high was not a good high (meaning it was likely to go higher or put in a good high before going lower). I’ll include a good portion of the discussion here for educational purposes. From Thursday night’s plan:

The short setup played out overnight, which still offers the same sequence and target, but it is far less likely to be a durable high. As per above, we had a good excess low on Thursday (bullish) and a poor high (not bearish). It was still nearly a 100-handle short trade that ultimately led right into the dip buy area.

Notice the equal highs were popped overnight, it was soundly rejected, and the full rotation to the 330s was met (330.75 low of day)

That was then the area to look to buy dips and flip long, especially because the high was made overnight. I personally like to “hedge the edge” so after covering most of the short trade I held a few micro short runners while looking for longs with minis. This is just one way to “hedge the edge.” That way, if I stop out of my long it doesn’t hurt as badly and if the long works I can trail out of the short runners. I posted this in real time on X. This concept is discussed in the starter kit, and here is a direct link to a free video from last year Hedging the Edge

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Perhaps I sometimes include too much detail in my plans, but I do so for a reason. It would take me far less time to just post levels. My levels are as good or better than most out there, but levels don’t help you to know whether or not you want to interact with them (and how) in the moment.

The difficult part of day trading is processing information quickly and making the best decision you can. I try to help with that preparation and explain circumstances under which certain trades are more or less likely to work. Notice I am doing so ahead of time, not after the fact. I’ve seen plenty of other “FURUs” explain to their subscribers why their level didn’t work or how the subscriber interacted with it wrong in a given situation after the fact. There is value in reviewing trades that did or did not work and explain why after the fact, but it is far easier to “hindsight trade” than it is to teach and describe ahead of time what should be looked for. Every situation and every trade is different so referencing a standard execution template doesn’t work consistently. Developing an understanding of when and why certain trades work or don’t is far more valuable.

I was monitoring the 340-345 area but really preferred to see that area swept as it had already been tested with a wick on Thursday. A look below and fail of that range that held 323.75-328.5 (typo in the plan said 232.75) was preferred (higher rated). This is an example of the (perhaps) excessive detail.

First note the Thursday test into 340-345 (white arrow) and all the dip buying that had taken place in the 363-380 range:

Notice the first minute of Friday’s cash session (yellow arrow) holds 340-345 but the supply in the 363-380 range stuffs it back down (red arrows). Now those prior dip buyers from Thursday have had a chance to exit if they have paper hands and it clears upside for a second test. The 340-345 level is swept (likely taking the stops of many Thursday buyers and buyers from the first minute of Friday) but holds above the weekly 323.75-328.5 spot (and just above Thursday’s excess). Note the volume (white arrow) on the push through 340-345 (likely stops blowing) which is eaten by strong buyers into a 340-345 reclaim (green arrows).

The rally tags the 23401 target, trades sideways, and ultimately made it to Thursday’s high and new highs.

We got news of both a China tariff extensions and a deal with the EU today as I was writing this plan. We can reasonably assume we’ll see a gap up from this but take note if not. As I’ve said numerous times, “If what we expect to happen doesn’t happen- pay attention.”

Starting the week this way certainly sets the stage for the upside acceleration scenario discussed in the weekly plan.

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