Market Analysis and Trades for 9/22

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The weekly post for SPY 0.00%↑ and QQQ 0.00%↑ should be reviewed prior to this. Market Analysis for the Week of 9/14

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For ES into Friday we were monitoring 6687-6690 and 6707-6710, expecting rotational trading in between. This means we are looking to short the top (or better a look above and fail) and long the bottom (and better a look below and fail). With a bullish bias longs were solidly preferred, but the range was very cleanly rotation which makes both sides fully valid. From the Thursday night plan:

Price consolidated most of the night in between as expected. During the European session (of course) the LBAF played out and rallied as expected to 6707-6710. This then flipped into a premarket and cash hours LAAF for a nice short down to 87-90. This then set up the best cash hours trade of the day as 87-90 held, ultimately cracked the 6707-6710 spot, and met the targets of Thursday’s high and the weekly 6729-6732 spot.

Not all of my levels are such clean rotations (I rarely trade them “level-to-level”) but when we identify clean rotations it offers beautiful two-way trading. Not all traders enjoy this type of trading but it does offer an excellent risk/reward profile and are generally very “low sweat” trades.

We were ready in the Discord for the long at low of day. My read as early as 10:26 EST was that the IB might break to the downside but not produce any kind of trend day, just a wider balance that would offer a long:

As of 11:15 EST I started looking for the next 30 minute candle (11:30 start time) to produce a look below and fail 30 for a rally. While not every LBAF 30 is a long, I had reasons to suspect this one would be and suggested that shorts start covering by 6691 as a long was likely to set up:

The low of the 11-11:30 candle was 6690, at 11:30 the fresh 30-minute candle opened, immediately looked below and failed 6690 at our weekly level, and the rally was immediately on.

This long was part of rotational trading anyway, but it had some additional reasons to produce a meaningful low that could get through 6707-6710 and on to the upper levels. It isn’t every day that multiple A-level setups present, but clean rotational ranges do tend to offer the best setups. This is meant more for those that prefer trend trading. Often these (seemingly pesky at the time) rotational ranges lead to the cleanest trend moves.

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