SPX ES SPY Setups for 12/21

Extended Free Commentary Tonight

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COMMENTARY:

In last night’s video recap I had pointed out the prior balance range of roughly 4748 to 4788. As we close right at the bottom of this range we were fully prepared to test higher first today. This was on top of the fact that I suggested that the entire move down was precipitated by an opportunistic large participant who saw the same thing I saw yesterday. It was simply a setup, and during low liquidity holiday trading any desk of any meaningful size can pull something like that off with inventory so fully 1 sided. Long liquidations strengthen the market, and liquidations are easy to retrace. We did a lot of that today.

After the initial break of 4788 on Monday we had a trend phase into yesterday to roughly 4828 with a quick pop to 4830. This additional 40 points represents nearly a perfect 1x extension of the prior balance range. Thus, I proposed it was possible that we were simply expanding this balance to an 80 point balance range.

Given the above, we had to be open to a test to 4788-92 area with possible extension into tomorrow of a full retracement.

Our long setup 2 played out beautifully in the overnight session just before open for a quick 20 points. Small squeeze indeed.

Knowing that the move into 4792 was a squeeze ( a short liquidation) and liquidations are easy to retrace, we knew to expect a pull back but we favored longs on dip buys in the 72-75 into the open (Discord is EST -2)

Price pulled back perfectly to my trademark 5 minute rebid setup and ripped directly off 73 for a second chance at 20 points.

From here we were simply watching for a break of the 73-92 range as we had known since before the open that it would be the defining range

We then had a little fun while we waited for the range to break (let’s be honest you know you’re here for the memes first and foremost)

The break of this range (4773) yielded 10 points in a single 5 minute candle where we covered some 62-62 (always cover on liquidation candles)

Anyone that held runners there got another 8 points into that capitulation puke to 55.5, another liquidation that we should of course cover into.

So now we ripped into the close back up into our 4792-96 “choose your fighter” range. Acceptance above 4788-4792 will be key for direct continuation, but there are dip buy setups available into tomorrow for a greedy entry that can take us the rest of the way up. We also have short setup into tomorrow.