Watch for test-reject below ES 4100 tonight or tomorrow
Tuesday's close looked brutal, and everyone is expecting a test of last week's lows coming next. I'm thinking this is setting up for a +EV long. The market has been extremely fibbo-responsive lately. Setups based on volume profile and fib retracements/extensions alone have been working wonderfully. I'm watching the high-volume edge and 50% retrace just below 4100 on ES for signs of accumulation. I expect a long liquidation under the 4100 psychological support similar to 5/13 sometime in the next 24 hours to test the hearts and minds of the bulls and suck in greedy short sellers in the hole. We may see 4077.75 trade, which would be a fantastic spot for a resting order if your trading plan allows for them. I'll personally be waiting for confirmation of some absorption down there, but if 4077.75 holds and we close a 30 min candle back above 4100, get ready for a 50-100 point squeeze on ES before week-end. Thinking London session tonight would be the easiest to sink (seeing as they bought the highs and closed before we broke support). NY session would be the most likely to squeeze shorts, especially if everyone shorted Monday's close, otherwise, could be Thursday before we see such a bounce.
Closing Wed under 4070 would make 4000 inevitable, setting up for a end-of-week battle for the weekly 20-day line. There's more VP anomalies below that, however, so just because we trade under 4000 doesn't mean the entire bull thesis is broken. The LVA above 3972-3980 may fill in with single prints if we hit it at open or close tomorrow, but lower than that, we'll see value-hunters all the way down to 3900. A test into the top of that "March Chop" zone would be healthy for the overall trend as long as we close back above last week's lows. Close the week below 3800 would be beyond a 2-sigma event, so it's really not necessary to fear such a move-just be aware that it's unlikely to occur. Any longs entered above 4100 should be long discarded before such extreme price excursions unfold.
Closing Wed under 4070 would make 4000 inevitable, setting up for a end-of-week battle for the weekly 20-day line. There's more VP anomalies below that, however, so just because we trade under 4000 doesn't mean the entire bull thesis is broken. The LVA above 3972-3980 may fill in with single prints if we hit it at open or close tomorrow, but lower than that, we'll see value-hunters all the way down to 3900. A test into the top of that "March Chop" zone would be healthy for the overall trend as long as we close back above last week's lows. Close the week below 3800 would be beyond a 2-sigma event, so it's really not necessary to fear such a move-just be aware that it's unlikely to occur. Any longs entered above 4100 should be long discarded before such extreme price excursions unfold.
Trade closed manually:
This one setup as a day trade but didn't squeeze as well as anticipated due to price reaching above 4100 before the fed minutes. I personally didn't execute it as well as I could have due to fed minute jitters, but the entry did setup as expected. Price pushed below the pivot, then found between 4075-4078 (twice). NY close on ES/SPY was relatively poor due to QQQ closing the gap before SPY. This acted as a ceiling for ES, making this trade less profitable than expected. I saw no reason to get long again at close. ES has a poor low to repair and SPY has an unfilled gap below that. Much more likely that we spend the rest of the week between 3880-4110. If anything, momentum is with the bears now.