Market Analysis for The Week of 8/10

Box is Still Box

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SPY 0.00%↑

Last week’s close was an excellent close for sellers. This week’s close was an excellent close for buyers. We remain in what is now a 6-week technical balance following an inside week. It is not uncommon to see an inside bar following an outside bar which is exactly what we got. The intra-week action was anything but what the weekly candle suggests, with a ton of back and forth that is characteristic of inside weeks. This is a great example of why I prefer the failed range breaks as trading almost always becomes extremely one-sided on the way back through.

Coming off the bottom of the range, ES and NQ slowly grinded their way higher through the weekly levels, making higher daily highs and higher daily lows within the week. Dismissing the intraday volatility, neither index took out a prior day’s RTH low during RTH the entire week.

The trap of the week was easily the Tuesday evening look below and fail of Tuesday’s low on the AMD earnings release. After holding the weekly 23023-23046 and reclaiming the major weekly 23090-23108 spot, it went on an absolute tear taking only a slight pause after the massive (but thin) Wednesday evening move.

ES is in a clearer balance than NQ, with NQ clearly much stronger. The break from this recent balance (with continuation) is unlikely to produce a small move.

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