Week of 3/24/2024 for SPY SPX ES

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As mentioned in the free post for this weekend, seen HERE QQQ 0.00%↑ held the bottom of its box range twice last week and made its way to the top where it has tentatively looked above and failed. It did close right at the top of the range so an early week pop can negate this potential weakness.

For SPY 0.00%↑ we were primarily monitoring the 3/10 week upper and lower distribution, with the middle distribution acting as a bit of a “decision node.” From last week’s commentary, nothing bearish could happen unless the lower distribution was capping upside. It instead capped the downside and we thus resolved higher. From last week’s commentary:

Given the Friday 3/15 close with both QQQ 0.00%↑ and SPY 0.00%↑ at the bottom of their box ranges there was no surprise that ES tested higher to begin the week. There was an incredible overnight squeeze that saw ES rip straight through 5210-22 and open the cash session 40 handles up at 5225.5. The 5235 target was met and exceeded by a few handles and then sold off straight back to the lower distribution to 5186.

Even with the sell into Tuesday morning, the bearish scenario never played out (not even close), thus it was a BTFD opportunity as per the above:

This sequence higher Monday all the way to 5235+ did a couple of things that offer an important learning opportunity. First, it left Friday’s sellers (and Thursday’s as well) horrifically trapped down in the 5170s-90s. It also gave weak handed longs from earlier in the 3/10 week in the 5230s a chance to exit. As stronger buyers then defended the 5180s during the late European session Tuesday morning, the aforementioned remaining trapped sellers were forced to cover (if they hadn’t been squeezed Sunday night into Monday), and price rallied into and after the open on Tuesday right back to the 5230s. From here ES remained bid above 5235 with only a few small and brief excursions below overnight and during Wednesday’s session. There was really nowhere to go but higher.

There is objectively nothing bearish in price right now, but there are couple of potential short setups that could play out this week, along with a couple fantastic dip buy opportunities. As always, I will lay them both out so that subscribers can trade their bias, but at least do so at good locations to optimize reward/risk if their bias proves wrong.

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