$ES/$SPY Inflection Zone Reached? What Next?
So we finally got this range to break today and to the $4180-$4190 spot I was looking for on the break of $4160 which was good for this market.
Two days ago my plan was to fade the $4160 break with ES calls but after that $4130 close last night and this Nasdaq signals I decided to hold off on getting long.
The one thing I’ve learned from over a decade of doing this is to not to try to catch every move. It creates a less stressed environment and once you do this for long enough that becomes more important than anything.
Here is what I had said a few days ago on this breakout:
$4088-$4098 area an area where I may look to buy small. Again, we are not in a trend, we are in a range/distribution so that changes my risk allocation. At this point the break of $4160 into $4180 is something I am just going to avoid. It can trade there but I’ll just wait and see if I can short up in that zone but if we do not trade into $4088-$4098 I am not getting long.
And we didn’t breakdown at all today so I didn’t get long. Instead I focused on WTI Crude and got long that which was ideal.
But now that we’re at this inflection spot on ES/SPY what comes next?
We traded right to $4179s and faded a little but not much. When price gets to an area of interest for me there are tells to what price can/should do. How you trade that area is subjective to each trader but for me I’ll watch to see the initial touch/test.
I’ll even look at Yen futures to get a read given that correlation those to have.
I made a video on the YouTube channel here explaining that.
And right now we’re getting close to signals on Long Yen and Short Nasdaq - so I am still cautious on this ES/SPY long.
Again, this is why I wanted to fade the long into $4180/$4190 ahead of time in the event that we got to where we are now and kept pressing.
If we press, I am in small but have exposure.
But, like my plan said last night I avoided the long all together.
Mad? No. There are going to be some moves to be made here with OPEX on Friday and given where this Yen/Nasdaq are we’re going to seem some fireworks in the coming days.
Below is the recap for today and my plan for tomorrow now that we have traded to $4180-$4190. I also cover some notes on Yen futures as well as why I think we are getting topping signals on this market, short-term.