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Our View
Largely, I think what we wrote on Friday still applies regarding the current trading environment. If you missed that or want to give it another read, feel free to do so.
It mostly centers around this point: The current trading environment is not easy!
It’s a choppy, sloppy market as interest rates continue to rise and as various asset classes continue to send mixed messages. Hell, even different sectors are sending mixed messages! If or when you get time, give our recent video from last night a watch:
Our Lean
In my humble opinion, traders are caught between two key trading rules:
Don’t fight the Fed
Don’t fight the trend
The Fed is hawkish, but the Nasdaq is trying to break out. That creates a tough concept in traders’ heads, because for many, their whole career has been pegged to these rules.
Our Lean:
This is Danny Riley’s personal trading plan for the day. To get this delivered daily, please consider upgrading to a paid membership.
MiM and Daily Recap
The ES traded up to 3998 on Globex and down to 3937, before opening Friday’s trading session almost smack dab in the middle at 3962.50. The ES dropped 25 handles, nearly retesting the Globex low, rallied 36 points to 3973.75 at 10:30 and pulled back 31 points to 3943 at 11:00.
That set up a higher low, which was followed by a higher high an hour later when the ES rallied 42 points to ~3985. After a 24 handle dip, the buyer stepped in as the ES marched higher in an orderly fashion, climbing 34 points and trading 3995 as the 3:50 cash imbalance showed $2.4 billion to sell.
The ES traded 4002.50 at 4:00 and settled at 4010.50 at the 5:00 close, up 23.25 points or 0.58%.
In the end, the ES gyrated a lot in the first two hours of the day, then settled into a solid uptrend. In terms of the ES’s overall tone, it was another Fry-Day. In terms of the ES’s overall volume, it was a little low but still respectable at 1.87 million contracts traded.
Technical Edge —
NYSE Breadth: 60% Upside Volume
Advance/Decline: 61% Advance
VIX: ~$21.50
S&P 500 — ES
From Friday’s low to the Globex high, we’ve already traveled about 100 handles. Markets seem to be celebrating the fact that no one blew up over the weekend. The ES faces a major test as it tries to push through the 4025 resistance area and the 50-day moving average.
Key Pivot: ~4010
Downside levels: 4000, 3985, 3973, 3957
Upside Levels: 4040-35 + 50-day sma, 4045, 4065-70.
SPY…
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Open Positions
Bold are the trades with recent updates.
Italics show means the trade is closed.
Any positions that get down to ¼ or less (AKA runners) are removed from the list below and left up to you to manage. My only suggestion would be B/E or better stops.)
** = previous trade setup we are stalking.
FSLR — Down to roughly ¼ size here trimming $213-$215 and as FSLR got all the way to $218 yesterday. Congrats!
I am completely out of FSLR on that push, but if still in, use a B/E or better stop. As always, ¼ position = runners, which = manage how you’d like!
AAPL — [premium only]
Go-To Watchlist
Feel free to build your own trades off these relative strength leaders
Relative strength leaders →
NVDA, AMD — Looking for tags of the 10-day ema.
[premium only]
Economic Calendar
