Market Analysis for 1/10/25
NFP to decide?
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The weekly post for SPY 0.00%↑ and QQQ 0.00%↑ should be reviewed prior to this. Link to Market Analysis for The Week Ahead
Be sure you have read the Trading Doggy Style Starter Kit. I will be adding to this over time, likely first focusing on example executions. Trading Doggy Style Starter Kit. A recent update has been made with some additional content.
Our bias for Wednesday was to be short below 5960-5965 targeting 5940s and Mondays 5935 low. We would need to be cautious on the short side once 5917-5922 was tagged.
After an excursion above 5965 during the early overnight session, price got trapped back below 5960-5965 during the premarket session and proceeded to and through Monday’s low. It did this both premarket and during the cash session. Bulls staged a nice rally following the cash hours LBAF of Monday’s low, but sellers showed up at 5965 once again and produced a lower low down into the major weekly 5917-5922 range (5917 low of day).
The day offered some nice two-way trading. This was a great example of a rotational day. As a day trader, we need to be comfortable trading both the long and the short side, and at minimum knowing when it is a day to take our profit and run vs holding for a trend move.
As bad as some of the technicals and internals look, we need to remember that we are still trading in a range. It is a FAR wider range than we saw last year for the most part (great for active traders) but it is still a range. At its extremes, the range can be defined by the weekly candle from December FOMC week. It is acting as a “mother bar” which we have discussed in the past. All action to the right of that candle is “inside” and thus we can see choppy two-way action.
We define more narrow ranges within each week and day, but it is important to remain mindful that it is still part of a bigger range.