Trade Plan for 10/9
It's Just a Box Until it Breaks
As mentioned in the weekly plan I’ll mostly be out this week. We’ll have daily plans but I won’t be active in the Discord every day.
The weekly post should be reviewed prior to this. Link to The Week Ahead
Big picture nothing has happened this week. We closed last week at the top of the range. Bulls failed to initiate an upside breakout on Sunday night/Monday and thus we saw weakness on Monday. Monday evening took us to the bottom of the range, and we rallied right back up. If you’ve been following for a while you’ve seen this repeatedly. We must remain cautious getting too bullish at top of range or too bearish at bottom of range. Until one side breaks with continuation box remains box.
Here’s a look using US500 as it doesn’t decay like ES. I am choosing to use 5768 as the top of the range (though clearly bulls will need to sustain above the current ATH 5773.2). 5760 has also been a rather difficult spot. The bottom of this range I’m using 5674.
For ES (again, it has decayed since the current ATH) I’m using 5724-5820.25 with 5809.5 (really the entire 5804.75-5809.5 range) as a key spot to clear. Bulls have aggressively bought dips below our 5733.5 level every time.
Zooming in we can see the failure in the 5804.5-5809.5 range on Sunday night leading to the short into Monday. For today we were monitoring sellers’ ability to sustain below 5755. They were able to do so in the early futures session which led to a retest of last week’s 5724 low (overnight low 5725.25). We can also see what happened once 5755 was cracked to the upside, the consolidation and decision point in the 5769-72 range, and the resultant move to Monday’s high and ultimately range high when 69-72 held from above. From last night’s abbreviated plan:
Today’s close once again gave us a key profile characteristic to work with ahead of tomorrow.