Week of 6/16/2024 for SPY SPX ES
IMPORTANT REMINDER
I will be on vacation from 6/18-6/28. Billing will be paused so no new signups will be possible during that period and all existing subscribers will have their next payment pushed back. The Discord will still be running, and I may pop in there from time to time in the evenings, but no newsletters will come out.
The index bull market continues, despite (once again) significant deterioration across individual sectors and names. We have seen this time and time again the last few years. Breadth deteriorates while the mega caps run, and (at least previously) breadth widens out as the mega caps consolidate. As long as this continues to be the case, we must set aside any bearishness regarding internals at least as it pertains to directionality of the broader index. There will come a point when this pattern ceases, and we see a more significant move lower. This, however, could take many months to play out. I simply keep it in the back of my mind, set it aside for purposes of trading the index, and watch for something meaningful to change.
Because of this, each week we outline both the bull and the bear case. In the absence of the bear case playing out, we know to be long. From there the only question is where we will buy dips (enter the bull case). From last week’s commentary:
Last week 5331-5335 was the key inflection point. Last week’s low was 5334.5. The scenario for a long to new highs was a hold of 31-35 that reclaimed and held 5349-51. This played out perfectly and we rallied 100+ handles in a straight line after 5350 held from above.
The week of 6/2 we were monitoring 5270 and 5264. The bear case was lower highs and lower lows below 5264.
In the absence of the bear case, we were looking to be long if 5270 held or if we saw a look below and fail that held 5264.
Monday 6/3 we traded lower as expected in the plan. ES traded below 5270 and 5264, but ripped right back over it and there was never a danger of lower highs and lower lows below it. On Tuesday 6/4 the ideal setup played out: A look below and fail of 5270 that held 5264. This played out perfectly and we rallied 100+ handles in a straight line after 5270 held from above. Notice the explosive move once 5307 held a back test from above
Be sure that you have read the free series I’ve started introducing Volume/Market Profile. I will continue to add archives of free content as it will be easier to find than searching for old Substack posts. You can find it halfway down the page at the following link PharmD Capital