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Our View
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The Nasdaq has been outperforming the S&P all month — and all quarter. When the ES does sell off, it’s because the NQ is downticking. When the ES found its low yesterday, the NQ was chopping off the lows and when it finally caught a bid, the ES went right up with it.
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Three days ago, I said I thought T+2 would be up (Wednesday and Thursday) and that was spot on. Do I think there is more upside? Yes I do actually, but again I don’t think the ES is going to go straight up without some pullbacks. It’s the nature of the beast.
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Do I think the ES is going to keep going up in April? There is a good possibility that it will, but the higher we go the more likely we hit a high at some point. Like I said yesterday, there is no room for pats on the back when you’re right. It’s all about remaining focused and not getting ahead of the markets. Take what’s yours and move onto the next trade.
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Our Lean
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Here is a link to the MrTopStep Trading Rules 101. Scroll down until you find the Walk Away Trade. This trade does not work everytime, but in most cases it does suggest a pullback/stall for today’s trade.
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We traded this on the floor for years and when it works it really works, but this will depend on what the boys with the better seats have to do late in the day. If the markets are ‘bid’ going into 3:00 ET then you will want to pay close attention to the MrTopStep imbalance meter (the MIM).
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In the first part of the day, if the ES gaps up on the open I would look to sell into it, but there are a ton of buy stops that start at 4086 that basically go up to the 4118 to 4122 level. Remember, everyone is long now and thinks higher. That may be but not without a little “shake rattle & roll.”
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As for today’s levels, we’re watching 4090, then the aforementioned 4118 to 4122 zone. Above that is 4150-58. On the downside, we’re watching 4074, 4058, then 4035 to 4040.
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MiM and Daily Recap
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The ES traded up to 4085.75 on Globex and opened Thursday’s regular session at 4085. After the open the ES traded 4085.50 and then, dropped a few points and rallied up to 4087.75, dropped down to 4072 at 10:15 and then traded back up to 4084.75. The ES rallied up to a higher low at 4082.25 and then dropped down to a new low at 4064.50 at 12:45, traded up to 4061.25 at 1:45, rallied up to 4078 at 2:26, and then sold off down to 4072.25 and rallied 4078.25 at 3:05 as the early imbalance showed $195 million to sell.
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After the pullback, the ES rallied up to 4081.25 at 3:40 and traded 4077 as the 3:50 cash imbalance showed $1.4 billion to buy and traded 40x on the 4:00 cash close. After 4:00 the ES traded up to 4085.75 and settled at 4080.75 on the 5:00 futures close. Up 22.5 points or 0.55% on the day.
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In the end, it was a slow choppy day. In terms of the ES’s overall tone, it was firm. In terms of the ES’s overall trade, volume was again on the low side at 1.28 million contracts traded.
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Technical Edge —
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Quarter-end and Fridays are notoriously tough to trade. We’ve had a stellar week, first with the indices in the front-half of the week, then with follow-through strength in tech on Wednesday and Thursday.
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So let’s take it easy into Friday. Trade smaller and less in my opinion and be aware of the “larger forces” at play. Derivatives and institutions are going to control the game. They usually do, but that’s especially true today.
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Plus, the Fed’s main inflation measure — the PCE — is going to be a driving force today. So far, it was cooler-than-expected, but the market rally is mild thus far.
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Use today as an opportunity to zoom out and scan the monthly and quarterly charts, if multi-timeframe analysis is a part of your process. Cheers.
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S&P 500 — ES
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Toying with that 4090 level. A sustained move above it opens the door to 4100+ as the PCE number gives it a lift on Globex.
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Key Pivot: ~4090, 4074
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Upside Levels: 4090, 4118-4122, 4158
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Downside levels: 4074 (last week’s high), 4058, 4037-4040, 4025
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SPY
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Upside Levels (SPY): $404.35, $407.50, $410
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Downside Levels (SPY): $402.50 (weekly-up), $401.50 to $401.75, $400
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SPX
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Upside Levels (SPY): 4078-4080, 4110-12
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Downside Levels (SPY): 4055-58, 4035-38, 4015, 4000.
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NQ
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NQ held 12,700 and gave us 13,080+. Plenty of meat on the bone to feast on.
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Now keep an eye on 13,080 as the pivot to watch. Below it and we could see some of the recent strength unwind as it takes a needed rest.
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Over 13,100 and the NQ can continue to run.
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QQQ
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Two goals for the QQQ.
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Stay above the monthly-up mark at $313.68.
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Clear Y’day high ($316.32) and that VWAP from the ATH (pink line).
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WYNN
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Wynn has traded quite well on a weekly basis and held “where it needed to.” Over $110.73 — can use a 30-min or 1-hour close above — gives us a weekly-up rotation.
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Could put $113-113.50 in play, then $116-$117.
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Stop could be $107-ish.
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Open Positions
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Bold are the trades with recent updates.
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Italics show means the trade is closed.
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Any positions that get down to ¼ or less (AKA runners) are removed from the list below and left up to you to manage. My only suggestion would be B/E or better stops.)
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** = previous trade setup we are stalking.
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FSLR, NVDA, QQQ down to runners.
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AAPL — Long from $157. Trimmed down to half at $162. B/E Stop
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Any chance we can trim into $164 to $165?
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GOOGL — Trimmed ⅓ on opening push as GOOGL tried and failed to go daily-up.
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Likely stopped at B/E for most. If not, needs to regain $101.25, then $102.50.
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NVDA — Down to ¼ or ⅓ as we traded $274.99 Thursday. Down to runners here for most. Cheers
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QQQ — Down to runners, as we cleared $314.50 and traded through $316. If still in the trade, consider raising stops to
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AMD — Trimmed $97.50 and it got all the way to $99.50 for more trims. B/E stop and I would likely trim down to runners if we see $99-$100 today, (if you haven’t already).
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TRIP — short from 18.90 — out roughly ½ on Friday’s dip.
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Stopped near B/E
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Go-To Watchlist
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Feel free to build your own trades off these relative strength leaders
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Relative strength leaders → Tech remains absolutely the strongest group lately.
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NVDA, AMD
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CRM, GOOGL, AVGO
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MSFT, AAPL
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PANW, FTNT
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FSLR → so strong. We’ll look to get another long in this at some point.
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GE → love this name if we can get a test of the 10-week ema
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DKS
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Economic Calendar
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Disclaimer: Charts and analysis are for discussion and education purposes only. I am not a financial advisor, do not give financial advice and am not recommending the buying or selling of any security.
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Remember: Not all setups will trigger. Not all setups will be profitable. Not all setups should be taken. These are simply the setups that I have put together for years on my own and what I watch as part of my own “game plan” coming into each day. Good luck!
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