Market Analysis and Trades for 8/4
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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 8/2
ES was pretty straightforward today after the large Sunday night gap up. It pulled back hard in the last 5-minutes prior to open to just above Friday’s high, opening on a true gap up. The opening drive was immediately higher, putting in low of day in the first minute and never looking back.
NQ offered just a bit more drama seeing some further weakness off the overnight high into the open but failed to make it even to the Friday 5pm close on the initial move lower at open. Those sellers were immediately punished with a LBAF the overnight low materializing. Sellers attempted to defend the key 28500-28524 triggering the planned LAAF short, but the open back test held, no trade was put in below the low of the first 5 minutes, and NQ as well broke higher.
Today was an insanely strong profile. It would be reasonable to see some profit taking from here and perhaps even some “structure repair” from today’s move, but my bias will ultimately be to the long side until or unless sellers at least take out a prior day low. I certainly didn’t expect to get here in three days after holding the trap spot below 7357 but here we are at composite VAH. This is objectively a poor location to initiate new longs just like Wednesday’s low was a poor location to initiate shorts. I would argue it is less of a mistake here than there but into range high the most important thing to monitor is whether or not it breaks with continuation.
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