Trade Plan for 11/8

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For today we talked about strong trend moves and the fact that there is little reason to trade the short side, and that it was extremely likely that any dip would get bought. The overnight briefly dipped after opening below yesterday’s spike, and traded down toward 5954. It was suggested that while 43-46.5 was a stronger spot, the dip could easily be bought at 50. The overnight low was 5951 and it never traded back below 54 afterward.

Once yesterday’s high was flipped to support during late premarket, the true gap up was solidified. We opened precisely at the 5977 level, there was zero interest below the open (low of day 76) and price rallied to the next level of 5997. I posted on X and in the Discord that it was a good day to have your overnight VWAP and the +2 STDEV band on the chart and we can see how price would ride the +2 band and then pullback to VWAP. The FOMC dip held the overnight VWAP perfectly. Not all days are this clean with the overnight VWAP and the +2 but this was an obvious trend move to me.

From last night’s plan and the possibility that something like 50 might bid:

Today was pretty low volatility for an FOMC day which isn’t terribly surprising given 25bps was almost guaranteed. We often need to see what the market does the next 2 days to see a full response but in my opinion this applies more to the bond market than equities.

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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

6061

6047

6034

6022

6010.5-6013 todays excess high

6002 today’s pre-FOMC high

5993.25

5984-5985.5 A period single prints below 84 and 85.5 was the low on todays’s announcement/press conference

5976-5977 todays low and open

5964.5-5967 11/6 spike

5951-5954

5943-5945.5 (can just use the 5945 level again if you want)

5925-5927.25

See yesterday’s levels for lower

COMMENTARY:

We again assume that dips will be bought, but we are getting closer to an area where we can potentially stall out. There’s still no reason to randomly short, but we are well beyond the +2 STDEV of year to date VWAP on ES (non back adjusted) and nearly to the +2.5 on SPY which has proven Resistance previously. I do ultimately expect resolution to 6122 on ES barring some kind of fresh catalyst, but 6022 wouldn’t be an unreasonable spot to pause and find balance before resuming higher.

To keep this trend move fully active bulls will need to maintain above 5984. Above there my general bias will remain toward buying dips. Today’s high does have some minor excess but nothing remotely concerning on its own. If, however, we see price trading and continuously trapped below 6002 during RTH then it could be a slightly more meaningful warning sign.

Between 5993.25 and 6002 is a bit of a no-man’s land to me. We favor buyers in this range but there isn’t any one level I can specifically point at. Any dips below 5993.25 were aggressively bought after the rate announcement and this needs to continue. If 6002 is lost (say overnight) I would want to see some consolidation in this range followed by a move back up to retest today’s high. If this plays out overnight I’ll keep an eye out for long entries tonight and tomorrow morning and post in the Discord.

If we do lose 5993.25 and the dip isn’t immediately bought I will be just a bit concerned, but any hold or quick look below and fail of 5984-5985 is a long.

Trapped below 5984 and testing today’s open and low suggests that we are seeking balance and the active trend phase has taken a pause.

As it was for today, the more (SHORT term) bearish scenario is testing higher and failing. Something like a nasty excess high into 6022 and then trading back below 6002 would provide a setup for sellers to bring this into balance on Monday.