SPX ES SPY Trades for 1/24/24
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Today was a great example of how critical trade location is. The action after the open was extremely choppy to the downside, but sellers still failed to take out yesterday’s lows on ES and NQ looked below and failed yesterday’s low. Until 3:10 EST the range was bound by our first long setup and our first short setup. Entry at any other location may have been difficult to manage.
Futures had opened and traded sideways for most of the early session before heading lower to test the 4877.5 level at 03:40 AM EST. Price looked below by a single tick and the long setup was triggered. Late in the premarket session the rally extended to 4891.75 and the look above and fail of 4889.75 was triggered. Cash hours opened and retested 4889.25 from below and then headed back down to 77.5. Limited traction lower was seen as yesterday’s low of 4873.5 held (74.25 low of today). Reminder that 4874.5 was our level for yesterday’s long.
Hopefully this demonstrates the importance of trade location. If you executed a short near 4889.75 in the morning, or a long near 4877.5 then there was minimal drawdown. Both sides had valid trade locations and both sides could have made profitable trades.
Most traders would benefit from trading in alignment with higher timeframe participants. Currently the trend is very clearly up. However, this doesn’t mean that all day every day is a long at any location. Today was a great example of that. Anyone who tried to initiate longs between the open and low of day probably struggled and took stop outs, ultimately missing the move. Tomorrow has the potential to be difficult to trade, but for different reasons. I will discuss some of that in tonight’s commentary and trade plan.
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