SPY/ES for 8/29
No paywall tonight as a little birthday gift
Apologies for any typos I rushed this out so I can get to celebrating my birthday with the family.
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You saw in last night’s post in front of the paywall that the action in the 5646-49 range had me a bit cautious and that we would carry that forward into today. Both of our planned trades had played out ahead of the opening bell, with the short remaining active and never taking any heat after the bell.
We were monitoring for a look below and fail of 5632 if we traded lower first, targeting 5646-49. This played out during the Asia session into Europe. It then walked right into the short setup which was a look above and fail of yesterday’s high 5649.5. Today’s overnight high was 5650.5. The nature of yesterday’s high (a poor high) rendered the look above and fail a valid trade. Additionally, the seller up there very much had my attention.
You can see that buyers attempted to defend 32 again during cash hours (the low of the first 60 minutes- the IB low- was 31.75. Sellers stayed heavy in the 40s and then cracked the IB low with strong conviction. While this isn’t an absolute hard rule, I generally avoid taking longs below the IB low or shorts above the IB high. This, from there longs had to be patient as shorts were preferred. We can see sellers had absolutely no problem selling below the key 5613-16 range which was our first major change in character. In fact, 13-16 later became resistance.
We now find ourselves at risk of a box breakdown after Monday’s look above and fail. The look above was painful to watch play out but you can see that is when stronger sellers emerged in the high 40s and capped the range Tuesday and today.
The below will help understand some of the terminology in tonight’s free post. It is also free.
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Levels - Note not all weekly levels will be used each day but they could all present as part of an “active sequence” within a given day(s). Focus on the bold levels
See weekly levels for higher
5654-5655 Box top and last week’s VAH
5646.5-5649.5 slight tweak to 49.5 to capture yesterday’s which was a poor high
5632
5624.25 yesterday’s excess was below here and today we now have single prints above it.
5613-5616 (from below now)
5604 (5600.75-5603.5 from weekly works here)
5595.25
5585
5571-5573.5 Last week’s RTH low and major weekly level
5661
5547.5-5551.75
5526-30
5510
5500-5503.5
5487.75-5491
See weekly levels for lower
COMMENTARY:
Box is box. That is all. But really, we’ve been monitoring this box and using 5585 to 5655 roughly with some slight adjustment as we went along. We looked above and failed and as of the time of this writing have gap opened futures below 5585. 5571-5573.5 is key to hold or reclaim or else this has the potential to get gross. You may recall the last time we gapped down after my 5620s short it was on earnings and we gap opened below 5585 and that gap remained unfilled for quite some time. QQQ 0.00%↑ is set to potential open with an island gap if the gap down holds and that would be its SECOND island gap down on a lower high from all time high. We have GDP and jobless claims in the morning so perhaps that can be enough to trigger a reclaim. If not, this is a pretty significant technical breakdown. I’ve mentioned I feel like 5530 is a natural target but one would normally expect to see a full extension of the box range which is roughly 5500. From there you may recall in last week’s video (which was made free) that I felt it reasonable to find our way to fill the 8/14 gap ultimately. The pressure is very much on bulls to mitigate this weakness immediately. If 5571-73.5 is reclaimed then we can consider two-way trading. Otherwise my bias will be fully short.
Since it’s my birthday and I rushed to get this post out, no specific setups today but I’ll update late tonight and early morning in the discord. Good luck!
HBD Pharm!
🥳happy birthday 🎂