8-2-22 Spy/ ES Futures and Apple Daily TA
MODS- reposting due to banned ticker that wasnt even mentioned in my post at all… not sure how that happened… but reposting cause i didnt mention anything banned.
Well old Nancy landed safely in Taiwan… and the market goes crazy! The market was clearly very nervous about that trip and then it rocketed…. Some will argue that was why we ran up… but today we saw yet again an unsupport run up (aka not enough sell orders) and finally at 1245-1pm markets got “news” it could use as an excuse to dump and dump it did! That mid day sell off was quite wild. Today was very similar to yesterday in that they both were unsupport run ups in the morning follow by mid day sell offs. Today however we chose to dump while yesterday popped during power hour.
But to me today was a gravely bearish finish and tomorrow is going to shape up to be pretty red.
Heres what im seeing on the daily chart for SPY and ES Futures.
On SPY and ES futures you can see for the now third day in a row we have failed to breakout and test that level resistance at SPY 417.3/ ES 4178. This level also corresponds to the daily 200 EMA. This level is key resistance as back in late may/ early June this is the level where we rejected, consolidated and then dumped prior to Junes CPI. Why do I mention CPI here… well next Wednesday August 10th is when July CPI is released and it looks like we are setting up for the perfect consolidation and then early week (august 8th/ 9th) dump before CPI.
Overall the bulls were able to defend the daily 100ema again and hold key support for SPY 407.3/ ES 4090.
I mentioned yesterday that the SPY daily candle looked more bearish than then ES daily candle but now we are seeing both looking bearish into close today especially SPY.
Overall we are now trading for 3 straight days between the daily 100ema and daily 200ema. Until we see one of those levels break we should not full commit to going long calls or puts. Overall I am leaning more bearish then bullish going into tomorrow.
Bull case- Despite a failure to break yesterdays HOD, bulls were able to defend the 100ema and prevent a closing below that. Now that the Taiwan stuff is mostly settled (until something new happens) there isn’t much market moving news till CPI next week. On the weekly bulls were also able to hold the weekly 20ema which still sits over the weekly 100ema. For the last 3 days now intraday 407.2 to 409.1 has been extremely strong support and a massive consolidation zone. With another 407.2 (daily 100ema) bounce tomorrow bulls will look to retake the Monday HOD and close over SPY 412/ ES 4133.
Bear case- overall after a pretty strong and extreme momentum run up last week we are finally seeing some of that momentum subside and seeing weakness. Today bulls failed to break the previous HOD and are now actually building a 123 top which should lead to further downside. The current pattern is looking similar to the July 21st,22nd and 25th trading days. If that pattern holds true we are looking for a bull channel support test of SPY 404/ ES 4056 tomorrow. If bears can break this support then the next step is for them to close under the 100ema, close under level support and attempt to breakthrough/ close under 8 week long bull channel support. In doing so I believe we are going to start our next level down to 390 à 370 to gap fill. Yesterday I mentioned the daily candle finished in a gravestone doji, however, today also finished in a gravestone doji. I have not often seen double gravestone dojis. However, gravestone dojis generally mean that we are about to see a pretty impressive down side and that the “top” is in. I do expect this to play out tomorrow.
Tomorrow plan will be to keep an eye on that 404 level… if we break 404 then its time to load some puts… if bulls defend 404 or especially defend that 407.2 daily 100ema again we may form a double bottom and push higher before CPI is released next week. Overall with todays close and these daily candles I favor downside.
Overall the Apple daily chat is the most bearish of them all. Today apple closed with its third doji in a row.. two of which have been gravestone dojis. Todays candle close is probable one of the more bearish candle closes that we have seen on Apple in a while. I mentioned before apple pretty much drives this market right now and I believe we are about to see it drive us lower.
If you look at the weekly chart you can see when we compare last week and this weeks candles to the March 21/ March 28th weekly candles (the last big run up) we are looking oddly similar… I think we are putting the current top in and if not this week next week for sure we are going to see some good downside.
The most bullish thing for apple is that the bulls were able to hold 159.55 support pretty stoutly today. I am impressed with even the eod sell off today that they were able to.
Key support to watch tomorrow is 159.55 tomorrow, if bulls can defend that tomorrow we might retest 163.3 channel resistance once more before we start the descent. However, if bears can break through this support level they are going to target that gap fill at 157.64, which just so happens to correspond perfectly with the daily 8ema. If bulls can allow the gap fill and defend the 8ema at the same time there is a chance this could be the support bounce/ bull channel support test before we push even higher. However, once the bulls lose the 8ema I believe we are going to see a test lower closer to 147 to 151 before we bounce.
A little interesting fact about Apple is that it almost always fills the gap (atleast in 2022) after 3 days. So being that this gap did not fill today (day 3) there is a better chance that we could fill the gap next week. If we are going off statistics then we should actually suspect a bounce tomorrow off 159.55 and then next week we will look for the sell off.
Now that we have brought up CPI I think its time we have a little discussion about that… I am going to make a bigger post here in the future on CPI but the last four CPIs are have actually have seen the last four CPIs see similar sell offs. Overall the last four CPIs the two days that lead to CPI have seen an average drop of 2.6% over those two days. There is a pretty big case building here that we are going to see consolidation between the 100ema and 200ema or at least that 405 to 417 level the rest of the week and Monday and Tuesday next week leading to CPI is going to be hella bloody.
I will speak on this more in my dedicated CPI post but overall the feds are predicting a drop in inflation… however the Cleveland fed who is usually about 0.3% low is predicting a 8.8% inflation or really a 9.1% inflation rate again… There are a few fed members coming out too saying inflation has peaked.
Overall my thoughts on this week remain at consolidation before the next leg down. There is a case to be made that if the 405 level is broken this week we start the party a little early though.
Today was a great day for me.
I was waiting for the morning to settle out as I knew there was a lot of uncertainty with Pelosi. I shoulda rode those calls up as soon as I saw her land but I did not expect that big of a face ripper at all. By time things looked solid enough to get into we were so far over the probable high of day and close to the improbable high of day I didn’t wanna enter but for a scalp.
I played the 1245pm top perfectly but unfortunately I did not expect it to be that big of a face melter at all… exited with my stop limit around 4.7% and about a minute later the bottom literally fell out.
That 0dte SPX call was the weirdest one of the day as I had a 5% stop limit set, however, when it triggered it filled closer to 1.4%. IT was a limit not a market so im still unsure on that whole thing.
Overall im sure some of you agree and noticed but option premiums were funky. I noticed many times on pretty significant moves up and down that the premiums were hardly moving at all. There were other times were it just seemed laggy. I had someone in the server say that the premiums were so laggy and weird that he opened a position with an OCO take profit and it hit as soon as he opened the order. It was very weird. I noticed some of that yesterday too where premiums just didn’t hit right.
Overall todays lesson was I shoulda better utilized SPX 0dtes instead of the 1dte SPY. I would have better increased my % gains.
I also am still learning the 1min HA candles and overall I have really enjoyed them so far. I noticed a couple places of bounces and break downs today that I did not act on but watched play out as expected. As the week goes on I look forward to testing these more. Overall the 1min seems great for scalps and the 5min overall really helps with sentiment/ direction.
I know a lot of people struggle with the "i closed at 5% but man it ran to 100% right after." The things i have learned in trading is the times you close for 5% profit it runs to 100%… the times you refuse to close at 5% profit is the time it goes red… someone posted this chart the other day and its pretty eye opening…
Letting losers become even bigger losers are just hurting yourself in the long run… we should be closing losers at 20%… and we should not be focusing on what happens after we close it. Overall a bunch of small winners turn into one huge winner end of day. Its a marathon not a sprint.
Submitted August 02, 2022 at 11:16PM by DaddyDersch
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