SPX ES SPY Trades for 2/6/24
-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’s early session likely proved difficult for many. As I like to do when this is the case, I’ll provide a more extensive recap. Frankly this is the first day I can confidently say the setups were almost completely useless (I’ll explain why) and the commentary in the Discord was critical for ultimately finding the long.
We caught a nice long in premarket off the sweep and reclaim of 4964 with trims into 68,70, and 72 before the open. The fact that this long worked actually meant it is was LESS likely for 4956-60 to hold. The below picture is intended to illustrate why. We had held all night at 64 with a lot of buying done at that spot. It held again at the open as well. Thus, when we sold hard off data at 10 EST all of those long stops are now getting hit, increasing sell side pressure for any buyers looking to buy 4956-60. This additionally put price below both the overnight low and the 30-minute opening range low which is suboptimal for buyside participation. This is an example of context when deciding whether or not to buy support. The arrow points to the cash open.
Because of this we had to then wait for bulls to prove themselves for once. Waiting for the close of the initial balance (first 60 minutes) is key.
Right before the IB closed.
The IB low was then swept and reclaimed triggering a potential long which must be considered a scalp or quick trade until buyers repair some structure. This was an early entry for long with opportunity to add (or a safer entry) following the test of 4953.75 and then holding 4948 from above. If you aren’t sure why testing 53.75 and then holding 48 worked so well, I can elaborate in the discord.
Sellers attempted to defend 53.75 but the trapped sellers below 48 were enough to incentivize buyers to pile on and leave the sellers trapped.
The fact that we never closed the gap from Friday’s close was a bit of a warning sign that we might get some late day weakness. This indeed played out and we ended up with a relatively neutral to slightly bearish close as a result.
Tomorrow will be a pivotal day as it could determine if we buy the dip or sell the rip the rest of the week.