Market Analysis and Trades for 8/1

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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

Today provided the second day in a row with perhaps more volatility than many expected. This week is absolutely packed with catalysts between earnings and data so an increase in volume was to be expected. Both upside targets were met from the prior range break- 6420s and 6450s, price was about as far extended from the 100-day sma as it gets, and ES continued to struggle with the +2 standard deviation of the AVWAP anchored to just before the 6/24 gap up. This doesn’t mean it is time to blindly short as that is generally detrimental to accounts during upside price discovery, but it is a good time to proceed with caution. From the weekly plan:

Note we saw two brief excursions above this AVWAP band, both during the overnight session. The one partial test during cash hours was cleanly rejected (white arrow).

It is worth noting that sellers have still not yet met my criteria for an intermediate time frame trend change. It is presumed that the market is in search of a daily higher low. Was that today, or is there a deeper pullback in store?

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