Market Analysis for The Week of 9/21

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SPY 0.00%↑ QQQ 0.00%↑

When markets are bullish on all timeframes, I include a bit of a “line in the sand” in each week’s plan. For last week it was 6598-6600 on ESZ and really the prior week’s low. While FOMC day looked nasty into the low, 6598-6600 wasn’t even threatened.

All this did was form a multi-day balance which immediately broke to the upside on Thursday. From the plan for Thursday:

On Thursday both indices gapped up and held a backtest (QQQ much more clean) and saw upside continuation.

As long as the market continues to do this (box → upside break → box→ upside break) we go higher. The first meaningful change in tone will be a box break to the downside.

In last week's plan I mapped out an example of how we might form a multi-day box and then trade off of it as a teaching opportunity. I used the example where Monday was red, and the bottom of the prospective box would be the prior Thursday's open/low (6545.8-6554.41 range on SPX. This was not a prediction of what would happen Monday, but an example of a location where the bottom of a box was likely to occur. The market played it out differently, forming a five-day box, but at the exact area outlined. The market (as it often does) made it as difficult as possible by tagging the bottom of this (at the time prospective) box, ripping into the close, and then gapping out of it. We did long it in the Discord, but it wasn't easy. Seeing these potential boxes ahead of time can both keep us out of trouble to the short side and also set us up for amazing dip buys. This is where I excel, and this will be the focus of the plans for this week.

The weekly plan, and likely more so in the daily plans will be looking for these potential balance lows ahead of time. Our initial bias will be to get long at these locations until we are given reason to do otherwise.

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