What Did I learn about the Market Today?
Analyzing the attached weekly chart of the SPY, the market is currently exhibiting a fascinating period of consolidation, presenting a nuanced technical picture.
Firstly, the SPY is actively building a three-week balance range precisely on top of the 40-week Simple Moving Average (SMA), depicted by the red line. This extended period of equilibrium directly on a significant long-term moving average underscores a critical juncture. Patience is paramount here, as the market is clearly awaiting a compelling catalyst to resolve this balance and dictate its next sustained directional move.
Secondly, from a bullish perspective, the current price action is forming what could be interpreted as a weekly cup and handle pattern, with the 40-week SMA acting as the base of the cup. A decisive breakout above the resistance defined by this pattern would provide strong confirmation of the 40-week SMA as robust support, potentially leading to a continuation of the upward trend towards and ultimately breaking the all-time highs.
Finally, this three-week balance range is itself nested within a larger, previous balance range (highlighted by the white shaded box). This “balance within a balance” dynamic implies layers of market agreement and disagreement. The resolution of the smaller, immediate three-week balance will likely determine the short-term trajectory, but the ultimate direction will be governed by the eventual breakout from the broader, pre-existing consolidation zone. Traders will need to monitor how price resolves from both these nested ranges for clearer directional bias.
There are usually one or two ‘big plays’ each day. If you identify what the ‘big plays’ are and the key stocks, trading becomes easier. Why? Because you’re getting yourself in the right stocks at the right time. Today, there were two ‘big plays’ as the market chopped lower most of the day. The main plays were 1) Opening fade to 5-day SMA for a MAL 2) The biggest play was MAL at 13:00 pm
Personal Reflections
- What Did I Miss? I missed the massive MAL at 13:00pm which had several plays
- What Trade Did I do? I had a failed scalp in the morning with /ES, and I swung trade with GRND.
- What Worked Today? Taking MAL at 13:00pm.
Today’s SPY Trade Setups and Analysis
- Inverse C&H with break of white algo and rejection of 5-day SMA.
- Continuation rejection off ONL and moving average along with grey algo resistance.
- Lastly, there was an inverse H&S and a break of the blue algo with the right shoulder off the 5-day SMA.
