Market Analysis for 1/13/25

Trade Plan for SPY QQQ

If you are looking to join the Discord please see here: JOIN THE DISCORD Please email help@pharmdcapital.com if there are any technical issues. Plans/levels will be posted in the Discord

The new update for the PharmD_KS indicator has now been published. It now has both sections broken out for NQ and also has a wildcard ticker that you can use for anything that we may be trading. See the Link here: PharmD_KS Indicator

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.

Friday was a bit of a 1-2 punch for equities with both NFP and consumer sentiment inflation expectations coming in smoking hot. I generally don’t make directional calls ahead of binary events like NFP but my bias was to the downside:

We had covered the important of ES 5917-5922 for the entire week, so the trade on Friday apparent, but was given with the premarket update in the Discord as a reminder:

We took profit on the way down and specifically at the 10:15 EST swing low:

At 10:50 EST we identified the seller “eating the squeeze” which means using the weaker covering shorts (who are buying) as liquidity for his own fresh day trade short. This was a great second chance opportunity to join the short for new low of day.

Just as important as having green trades is avoiding red trades. Thus, I was sure to point out that I would not be pressing shorts at 12:23 EST. We can see the massive cover rally that ensued thereafter. At 12:57 it was reiterated not to be short if we took out the high of the 12:30 30-minute candle after 1pm.

To end the day we saw a nasty sell stemming from the key SPX we’ve been watching for months, 5865-5872. I was personally done with day trades for the day, but we can see quite the sell response came in (again this is SPX levels now). They definitely made it interesting:

Trading a bear trend is quite different from trading a bull trend. In a bull trend your typical support and resistance levels are generally pretty well-respected. The action is slower, volatility is lower, and any aggressive sell is usually short lived as a result of a call liquidation. In a bear trend with volatility elevated, the rips higher are often more aggressive than the sell side action. Minor levels aren’t necessarily respected, the rip tends to appear extremely bullish, and then the tape suddenly flips and sells right back down. Many of the most experienced traders have a strong preference for trading the long side. Effectively trading the short side requires a completely different skill set and an intimate read on the intraday action. If you are not comfortable trading the short side, it is often best to sit out and wait until after a proper daily reversal has taken place. We will be prepared to flip sides and squeeze these sellers when the time is right.