Stalling Rally or Consolidating for the Next Leg Higher?

How I'm trading it

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Our View

I don't think there is much to say we have not already said. It’s a quieter week vs. last week — when we had the Fed, the jobs report and 5 of the Magnificent 7 reporting earnings — and that’s being reflected in the price action. 

You do not need a Ph.D. to understand the markets. Take time to learn and develop a methodology that fits your personality. This is really important when it comes to being a successful trader over the long term. 

Yes, I have a longer-term view that the ES is going a lot higher before the end of the year, but with so many economic and negative geopolitics — along with the S&P finishing higher by 24% last year and knowing how volatile things could get — it's OK to cut back. 

In the MTS chat room today, I said that the 'public is concerned' and for many reasons. I just take it one day at a time, and it works better for me. 

Remember, there’s more Fed speak today, which means more headlines.

Our Lean — Danny’s Trade

This is Danny Riley’s personal trading plan for the day.

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MiM and Daily Recap

ES Recap

The ES traded up to 4771.50 on Globex and opened Tuesday's regular session at 4969.25. After the open, the ES traded 4957.00 and rallied up to 4975.00 at 9:31, pulled back to the 4967.50 level and then chopped up to the high of the day at 4978.25 at 9:43 and then dropped 22 points down to 4956.50 at 10:15, rallied back 4965.25 and then dropped down to 9955.00 at 10:26. After the low, the ES rallied up 4966.75 and then fell into a back and fill under the VWAP and ground its way up to 4969.25, then dropped down to a 4955.75 double bottom at 12:26, jumped up to 4964.50, then back and filled under the VWAP until 1:26 when the ES made a 4970.75 double top at 2:01.

From there, it dropped down to the 4955.75 level, rallied up to 4970.50 at 3:08 and then sold off down to the VWAP at 4961.25 .50 at 3:36 as the early imbalance showed $44 million to sell. The ES rallied up to 4967.50 at 3:48 and traded 4966 as the NYSE 3:50 order imbalance showed $174 million to sell and traded up to 4975.75 at 3:55 and traded 4974.75 on the 4:00 cash close. After 4:00, the ES traded up to 4976.25 and settled at 4972.25 on the 5:00 futures close, up 12.75 points or 0.26% on the day. 

In the end, I think the overall price action has turned to sell the rallies and buy the pullbacks. In terms of the ES’s overall tone, it didn't act badly versus the NQ and the weakness in NVDA. In terms of the ES's overall trade, volume was steady at 173k traded on Globex and 1.046 million traded on the day session for a total of 1.219 million contracts traded.

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Technical Edge

  • NYSE Breadth: 76% Upside Volume

  • Nasdaq Breadth: 68% Upside Volume

  • Advance/Decline: 71% Advance

  • VIX: ~13

    • Vol contraction ahead of next week’s monthly Opex  

S&P 500 — ES Futures

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Economic Calendar

Disclaimer: Charts and analysis are for discussion and education purposes only. I am not a financial advisor, do not give financial advice and am not recommending the buying or selling of any security.
Remember: Not all setups will trigger. Not all setups will be profitable. Not all setups should be taken. These are simply the setups that I have put together for years on my own and what I watch as part of my own “game plan” coming into each day. Good luck!

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