[SPX SPY ES for 5/2/24
The full weekly plan and commentary should be reviewed ahead of this post and can be seen HERE.
Another wild FOMC day on SPY 0.00%↑ is in the books. Prior to the event, the day was characterized by range trading which is fantastic for our style. The trade I wanted, however, set up after the vol crush driven rally. The entire day prices in the 5050s had been “accepted.” Thes are the real participants. Dealers buying back futures as hedges come off are ambivalent to price and should not be mistaken with “strong buyers.” Because there had not been any kind of meaningful rally prior to the event, this made it rather unlikely to be a durable move. There was no time to back test any key level and build value, and thus the entire move unraveled. It really was the last line for sellers to step in, and they certainly stepped in. Trading in the 5050s (and really if we had held below 5090s all day) I had no reason to add to the swing short. However, the opportunity to sell 5120s was too difficult to pass. From last night’s commentary and the trade in Discord:
Once 5127 rejected and 5124 couldn’t even be revisited, I took my shot and added to the swing short. The 30-minute reversal and sell back to VPOC made for a 70+ handle trade in 30 minutes. We took some profits on the way down to manage risk. Doing so prevents this overall trade from ever going red and that is how I personally manage risk.
QQQ 0.00%↑ traded its entire box range nearly perfectly today. One could have traded it either, or both directions.
The daily candles look horrendous, but bulls technically defended an extremely key location at the overnight low. It seems as though the index is attempting to establish value in the 5050s on a weekly basis. In order to do so without sellers trapping themselves, I believe today’s low will need to be taken out, possibly tomorrow. Otherwise, I would expect a rally to 5087-5100. We’ll discuss further in tonight’s plan
Seats are once again available for Trading Doggy Style school. Learn more here: Learn it For Yourself
The first 5 parts in my free series explaining some basic profile concepts is now available at www.pharmdcapital.com. Click PharmDCapital This section and other free material will be added to over time. Scroll down to the “Want a Taste” section to read it.
To learn more about how I trade, see the post “What is Trading Doggy Style” Here
-For those that trade SPY/SPX, there is an ES to SPY/SPX converter in Tradingview. See announcements in the Discord.