Hello Everyone,
Quick Notes: Yesterday the SPX/QQQ began with an early probe lower that was bought leading to an aggressive V bounce into Monday's close with ES reaching stalling just below my 4480 resistance level. However, that move exhausted the short term buyers and today the SPX/QQQ opened with a large gap to the downside. Once again dip buyers appeared and the indices bounced BUT today the bounce ran out of steam and the reversed lower and then accelerated to the downside after taking out yesterday's lows. Later in the session, the SPX bounced near it's 20 day MA/pivot support (4415/20) and managed to retrace around 50% of today's decline. Going into tomorrow watch ES 4440/45 to see if the bulls can recapture (build over) which would likely lead to another squeeze attempt higher. A failure to recapture opens the door to more downside probing with next support just below 4400.
As far as trade ideas, many charts are broken or loose not allowing for high quality setups. Recently, the trade shorts have performed quite well even prior yesterday's new highs. Index hedges served their purpose and one should adjust based upon your plan in conjunction with the highlighted levels above. Continue to trade what's in front of you first and foremost.
Note: Several previous ideas on watchlist remain valid but simply have not yet triggered so continue to re-examine each night. Consider making a fresh top 10-12 setups each night and put on front page along with existing trades. My advice is to keep your total ideas to a manageable number. Lastly, it's best to wait at times for valid setups to form - sometimes less is more.
Steve
