Market Analysis and Trades for 8/8

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The weekly post for SPY 0.00%↑ and QQQ 0.00%↑ should be reviewed prior to this. Both the written portion and the video can be found here: Market Analysis for the Week of 8/3

After sellers failed to follow through yesterday, buyers failed to follow through today after an enormous gap up. ES needed to hold 6395-6400 to hold in last week’s upper distribution and find a clean break away from this week’s established range. Bulls made an attempt in the first 30 minutes but were liquidated in B period (10-10:30) leaving behind a massive set of single prints. Yesterday’s spike was briefly defended before sellers stepped back in at the daily 6386-6388 level, driving price the 6355-6356.5 single prints from yesterday. Bulls made yet another attempt to defend and were once again liquidated to this week’s developing VPOC and yesterday’s open.

This was the last line of defense for bulls, and it aligned with the NQ 23331-23346 singles from yesterday and YM tagging Monday’s open. This was the logic for my long in the Discord since there were a few questions about it. Note the NQ and YM spots:

Low of day was 6334.5 and we got a nice rally into the close. Once again bulls ultimately defended where they needed to as yesterday’s low was protected. As disgusting as the daily candles have been, each day has made a higher high and a higher low. Today’s candle has the potential to represent a lower daily high, but that assertion simply cannot be made in my opinion without a prior day low being taken out at minimum. ES closed above the 7/31 low which, along with the 8/1 high, have been key reference points for us all week. NQ closed well within last week’s primary distribution. Both of these position bulls for upside continuation tomorrow. This entire week, however, has been a story of which side shows up to do business. It is therefore important to be prepared to sell rips or buy dips (and really both). The weekly closes will be particularly important this week. Coming into the week I characterized this as a 5-week and potentially 6-week balance. This week is thus far an inside week. This type of back-and-forth action is extremely common in an inside week.

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