Market Analysis for The Week of 5/10
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In last week’s plan the trappiest (and therefore most likely) scenario was to come down, peek below 7206-7211 into last week’s trapped sellers, to then find a reclaim of 7232-7236. This was indeed low of week. From last week’s video
Note the LBAF of 7206-7211, and the strength found following the 7232-7236 reclaim.
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I’ve decided to share the first part of this week’s commentary above the paywall:
I want to first take a moment to reiterate some of the most important things I’ve said the last few weeks. It is easy to lose the big picture in the midst of intraday volatility or even day to day volatility.
First and foremost, we have a multi-month balance break to the upside with NQ and ES in price discovery. Until or unless this breakout is negated, there is nothing bearish on high time frames. The rally has come so far that even a 50% retrace of the move from the March low on NQ would just be a back test of this breakout. For ES, it would be a 38.2% retrace. This is unequivocally bullish.
On intermediate timeframes, there is nothing bearish until a multi-week balance breaks to the downside. ES and NQ haven’t even come close to taking out a prior week low which would just bring the weekly timeframe to balance. So, any kind of intermediate time frame bearish flip is two weeks away bare minimum. This is unequivocally bullish.
On short timeframes, there is nothing bearish until a multi-day balance breaks to the downside. Thus far, most instances of even trading below a prior day low have resulted in bullish engulfing candles and the rest have formed multi-day balances which have broken to the UPside. This is unequivocally bullish.
Thus far major extensions have resulted in a one-day pullback with near immediate resolution higher. This is unequivocally bullish.
Every single key LVN on the way up has been defended, with continued volume build to the upside. This is unequivocally bullish.
Every hint at weakness I've sensed (literally twice since the low) has resulted in at best a 2% pullback with immediate resolution higher. This is unequivocally bullish.
If long, it is a trim some trail some situation for me. If you’re long from say, the nut low swing long setup from the 3/30 plan, then you have nothing to worry about arguably until January’s high is given back. Any time the daily is framing higher (higher daily highs and higher daily lows) and until a multi-day balance is broken to the downside, runners on any day trade long can be held. The reverse would be true in a downtrend. Nearly each week since the low, the weekly plan has captured low of week. Trim some and trail some.
Given all of the above, I will still spend more time discussing potential downside each week and each day until there is some kind of balance formed. There is truly nothing to say about trading higher situations. If we go higher, then we go higher. Extensions haven’t mattered a ton, targets don’t matter a ton, all of the bearish divergences that so many have pointed out haven’t (yet) mattered. All you need to know in order to stay long is which dips are constructive and which are potentially not. I do the exact reverse when all timeframes are bearish for the same reasons. It is this preparation that has allowed me to catch every major turn in the index since the start of this publication, and that isn’t hyperbole or exaggeration.
Following that level setting, let’s discuss which dips for this week will be constructive, and which would perhaps not be.
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