Trade Plan for 11/19
Time for a Swing?
The weekly post for SPY 0.00%↑ and QQQ 0.00%↑ should be reviewed prior to this. Link to The Week Ahead
In case you missed the announcement from last week the pricing change on the course will likely go into effect this Tuesday and the announcement regarding Discord perhaps shortly thereafter. Announcement
We were expecting relief to begin the week and the purpose of the non-paywalled “Markets Overview” post was to illustrate why. We did get some additional relief today with bulls defending a higher low (relative to Friday’s low and the overnight low), and a higher high relative to last nights overnight high. It was, however, just an inside day. We still have Friday’s high and an island gap to deal with above.
There is a decent chance I will have an index swing position tomorrow.
Tonight’s plan will cover the direction and location(s) from which I will swing the index.
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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 in general and certainly on high time frames
ES Levels to add to the weekly levels for Tuesday
5933 today’s high
5912 today’s IB high and roughly Fridays VAH
5895.25 today/Friday’s buyer likely needs to defend this
5891.25 todays low
5885 Fridays VAL
5845.5
NQ Levels to add to the weekly levels for Tuesday
20723 todays high
20660
20501 todays low
COMMENTARY:
Today was an inside day so and therefore the following generalizations can be made. Above today’s high (with continuation) sees Friday’s high. Below today’s low sees Friday’s low. A look above and fail of todays high is a short and a look below and fail of todays low is a long. The same will apply of Friday’s range in this instance. I’ll treat it like an “inception box” like I did with an inside day a month or so ago. I won’t treat all inside days the same but will in this case.
The below is RTH only to have a visual. Blue is todays range and yellow is Fridays.
In addition to those trades I will add the following:
LONG: (And valid to attempt a swing long off this)
The 5895-5900 area is of interest to me and I would try a long and attempt to swing it. This sits right at our weekly 5900.75-5904.75 spot. This could actually get bid closer to 5902-5907 so I will be prepared to look for longs there as well and just manage size. Traction below 5895 and through today’s low would invalidate the long setup. I didn’t want to include all these levels/ranges for the sake of the indicator but truly the entire 5895-5907 range must be monitored for a bid to come in. More serious buyers would bid it by 5902.
A look below and fail of today’s low is a long as mentioned above and it is similarly reasonable to try to swing from here. I would prefer to see this buyer defend higher.
SHORT:
I do believe the longer we remain capped below 5925-5927.25, the greater the risk of a continued liquidation. After the excursion above 5927 today, sellers firmly capped price below 5925 for the rest of the day. I’m therefore willing to take a crack at a short in the 24-27 range (perhaps even after a look above and fail). I may change my mind on this based on the overnight action and update in the discord. Sellers have a lot to get through before seeing Friday’s low, hence the swing long setup above. I would be willing to convert this day trade to a swing but I don’t think the probability is high enough for me to justify taking 2 positions at once. I would only hold this as a swing if there is significant follow through which I would address in the Discord if it plays out.
Any swing long attempt must be prepared to take profit, hedge or exit if any of the bearish scenarios play out. I prefer either of the first 2 so as to give a swing Some room to work if it remains valid.