The Week Ahead in SPY QQQ
Holiday Feast for the Bulls?
I did a dedicated post for Gold and Silver this weekend. My ultimate target on Gold is 3056.2, though it won’t be in a straight line. That post can be seen here: My Precious
My bias into last week was that the sell was a liquidation, and the dip would be bought. QQQ 0.00%↑ is certainly lagging but is always capable of catching up quickly. ES is effectively testing the last line for sellers as of Friday’s high and just above. Again, I haven’t seen any suggestion that high time frame participants are active (shorts) sellers. We had a liquidation of late longs, and we had some shorter time frame participants trading a range. Perhaps that changes this week but so far so good for bulls. From last week’s plan:
Last week saw some violent 2-way trading that was amazing for day traders and perhaps tested the patience of swing traders. In the end, it was nothing more than a back test as suggested in last week’s free Markets Overview post seen here Markets Overview
The weekly candle as of yesterday:
The daily candles:
It was easy to be shaken out of a swing long attempt based on the intraday action, but it is important to zoom out. This is my job, and the big picture was reiterated numerous times in the Discord. If you had difficulty holding on to a swing long, I would encourage you to watch the free video I put together on what I call “Hedging the Edge.” Hedging the Edge
We had talked about SPY 0.00%↑ January 600 calls since the prior Friday and Wednesday was the best entry to take them. The entry for a day trade (with option to swing) was stalked for nearly an hour and given in real time as it played out. The entry was ES 5890.75 at 11:31 EST with a stop of 5889.25. That translates to $0.15 of risk on SPY. SPY has so far run nearly $10.5. Here was the entry, shown on ES:
Discord here is EST-2. You can see that 5891-5892 was identified 50 minutes ahead of time as an area for a possible second chance long:
Then at 11:27 we started watching closely and executed the long within 4 minutes. Sellers made it just below 91/92 when I spotted a large buyer begin to absorb the sellers. The absorption began during the nasty looking 11:30 candle. You can’t see absorption in a stagnant candle after the fact but note the volume (yellow arrow) on that candle. The entry was the next minute.
I issued a reminder about the 600C for those that wanted them a few minutes later. That low was never threatened.
We have a holiday shortened week upcoming and volumes will progressively get lighter as the week goes on. If you are not already in a swing long position, another opportunity was provided on Friday in the Discord, and we can look to do the same on Monday and Tuesday.