Market Analysis for 1/27/25

SPY QQQ

If you are looking to join the Discord (now separate from the newsletter) 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 weekly post and video 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.

Time permitting, I will do a newsletter covering BA 0.00%↑ UPS 0.00%↑ JNJ 0.00%↑ NKE 0.00%↑ CELH 0.00%↑ and/or HSY 0.00%↑

It’s my youngest’s birthday Sunday so I may not get to it. If not, I’ll do some updates in the Discord and get a newsletter out perhaps Tuesday. I’ll be retiring from the Pharmacy profession in a few weeks so I look forward to having a lot more time to put into the Discord, the newsletter, and with the TDS course students. 🤝

See the weekly video for SPY 0.00%↑ and QQQ 0.00%↑ analysis. I am very much on the lookout for a potential change in character this week with FOMC, earnings, and PCE. This will be the focus for our daily plans and the Discord commentary. As we proceed higher there is very little to do but stay long. It is the detection of an early shift that is important for preserving capital.

**If you trade SPY or SPX off the ES levels please make sure you have real time ES data from whichever platform you are using. If not, I would recommend using a converter script that translates ES levels to SPX or SPY (there is one available linked in the Welcome room in Discord). For example, Tradingview charges a few dollars per month for real time futures data otherwise you’re watching it on a delay.

Levels - Note not all weekly levels will be used each day but they could all present as part of an “active sequence” within a given day(s).

ES Daily Levels to add/keep

6132.5 roughly Wednesday VAH, Thursday minor LVN, Friday VAL/close

6122 reference Friday’s low

NQ Levels to add/keep

22093.5 reference last week’s high. Probably could just add to weekly levels

22036

21920

21725

COMMENTARY:

I’ll start with NQ since we focused on it a bit in the weekly video. This is a tricky spot as we are seeing some potential signs of weakness yet remain above the gap up from Tuesday’s close. If we trade higher first, does one try to find a lower high to short and front run a breakdown or focus on longs while we remain above the gap? I think it is reasonable to attempt to short this below 21969-21976. Above there and we would probably need to let sellers prove themselves before joining. It is far too likely that basing above 976 revisits last week’s high and takes them out. I generally see two-way trading as reasonable between 871 and 976. The ideal scenario for sellers would be to cap 920 as upside and immediately drive through Friday’s low and the gap. It would probably take strong sellers (or an early Asia trap) to do so.

The first move of the week on ES is all about 6111.25. We can consider two way rotational trading in the 6119-6139 range (maybe up to the 6143/44 spot) but have to favor longs given recent bullish structure. As mentioned in the weekly plan, if we leave Friday’s buyers above 6144 trapped, then perhaps we may see some early week weakness. Trapped below 6111.25 and making lower highs and lower lows we can consider tactical shorts, but I would be wary of anywhere in the bull gap holding. I have two levels in there, but the entire gap should be considered potentially reactive. Back above 6143-6144 and I think we focus on longs with the exception of maybe a LAAF of last week’s high given it represents a potential double top and poor monthly high on ES. It would be better to wait until back below at least 43/44 of 37-39.

Trading Higher:

NQ

If we trade higher first, it is reasonable to look to 947-955 and 969-976 to cap upside and consider a short. I would see 969-976 as stronger. As always, be mindful of how the session is developing (whether Asia, Europe, or US cash). It is safer to try and catch a lower high after a failure at one of these areas and trade it toward 867-871, mindful of the minor levels in between. I’m willing to give this a B+/A- as there is 2+ days of trapped longs above 976.

As mentioned above I would plan to favor longs above 976 and let sellers prove themselves before considering a short up there. They may come in strong if 22036 is swept (or at 22059-22076) and sell it back to 976 but I’m not interested in fishing for a short there without given a good reason.

If we do get a LAAF of the 3-day box then shorts are valid. As mentioned in the weekly plan I wouldn’t love to see this as a seller, but it remains valid. Back below 22059 could find a rotation back to 21976. I’ll rate it a B/B+

ES

I think it is reasonable to attempt a short if sellers step in at either the 37-39 range or the 43/44 spot. Like NQ, catching a lower high after a failure at one of these spots (ideally below 37-39) is safer. For ES this is more like a B/B-

Basing above 6144.5 I think we favor longs to and through Friday’s high. At that point we simply remain mindful of the potential for a LAAF and lock some more profit. I’ll give this a B/B- as it could be tricky, have limited range, and buyers showed some fatigue late last week.

A LAAF of Friday’s high is a valid short as mentioned above, but it is safer to wait until back below 6137. The better trade off this might come Tuesday so I’ll rate this a C+/B-. Again, we’ve seen these LAAF in bull trends hold at the first area of support so I’m not rushing to short this market if we are trading higher.

Trading Lower:

NQ

A look below and fail of Friday’s low is a B+/A- long for NQ. I would be cautious until we are making higher highs and higher lows back above 871 but this would represent a hold of the bull gap and a LBAF of the 3-day box. It therefore has powerful potential. Here is a visual of the 3-day range.

I am lastly likely to look for a gap fill reversal long off Friday’s high/close. Allowing this gap to fill would be a sign of weakness from buyers but I would still expect it to be reactive. B setup.

ES

Friday’s low (6122) sits just above the 6117-6119 spot. Because of bullish structure, this renders a LBAF of Friday’s low as an A/A+ setup. We would want to see a rather ferocious bid come in off 6117-6119 that rips to 6132.5 where I would take some profit. If I see weakness sooner I will take profit faster. That said I would tend to see this getting 37-39 and likely 43/44 unless bulls have completely left the building. NQ showing persistent weakness might be the clue to lock profits faster on ES. Because we are in a persistent uptrend, runners can be held for a new ATH if we base back above 6144. Trailing stops can be used if we fail or look above and fail 43/44.

If we do get trapped below 6117-6119 then I would expect a retest of 6111.25 and expect it to be taken out (at least a quick sweep of it). I’m okay being tactically short here but it isn’t much range if the bull gap holds a quick trap, so I rate it a C/C+.

A LBAF of 6111.25 is an A/A+ long as it represents a hold of the bull gap. We would need to be sure that 6117-6119 and 6122 are cleared. Thus I’m taking profit at a rejection in either area. That said, we are in a persistent uptrend and this is the kind of trap that can generate the strength for new highs. I would let runners run as long as we are headed higher back above 6122.

Like NQ I will be looking for a gap fill reversal at Tuesday’s high. This might look gross if we see it on Monday, but we will evaluate its potential in the Discord, but this definitely has the potential to be a giant trap. I won’t rate it ahead of time since it represents such a large move from Friday’s close, but I’ll be interested there.