SPX ES SPY Trades for 2/2/24

-For those that trade SPY/SPX, there is an ES to SPY/SPX converter in Tradingview. See announcements in the Discord.

Discord policy may change to a wait period in the near future. Instructions for access (free for paid substack subscribers) are HERE. Reminder that it can take a couple days to get the invite link and ultimately assigned member status once in the “landing” area of Discord.

-To learn more about what this Substack offers, please click HERE. I would like to avoid people signing up before they know what they are getting.

RECAP:

Today was likely a difficult day for many traders. It is naturally to only think to be short following such a bearish looking day. In last night’s commentary I outlined why I was not feeling terribly bearish.

You can see that almost the entire overnight session traded above the 75.75-78 range, and in addition the ETH gap up never filled. The later is a very subtle, but important clue in establishing bias. During ETH, gaps are almost compulsively filled. The fact that sellers did not fill this gap brings their strength and conviction into question.

The first 2 hours likely proved quite difficult as there was quite a battle between sellers in the upper 90s and buyers in the low 80s/upper 70s. It certainly didn’t look like a trend day up by 10am EST and certainly not at low of day. This is another example of where initiating at the edges is critical. If you happen to have taken a long in the 75-78 range, you end up finding yourself in a massive up day. If you happened to initiate in the mid to upper 90s you made a nice trade, but got stopped out on your runners. This is part of trading. Most days are not trend days so expectation should be to collect the bulk of profits, and then keep runners in case there is a larger, potentially unexpected move.

I will add, I am more bearish today even after the earnings move than I was yesterday.