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Our View
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Friday extended the three-week rally right into new highs on the close. The question today is, will the ES continue higher?
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My general rule — when the shit isn’t hitting the fan — is that the ES tends to rally on the last 3 days of the month and the first 3 days of the new month/quarter (with the end of the quarter and new quarter taking up more emphasis on the buying).
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I am always honest about this kind of stuff and I want to tell you a story.
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Joel is an excellent trader and a very good friend of mine. He broke off his trading partnership 2.5 years ago and put $500,000 in his account. Now? It’s almost $6 million today.
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He traded for years on the CBOE in the SPX and OEX and now trades grain options. He graduated from Northwestern and got his MBA at Kellogg. My point? He’s way smarter than me.
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Then there’s the PitBull. You guys know the PitBull — aka Marty Schwartz. He’s one of the most successful traders of all time. He was a customer of mine back when I was on the floor and now he’s a very good friend of mine as well. My point? He’s had more success than anyone I know.
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And guess what? Both of these guys come to me for market feel. After all, I worked the orders on the floor for decades.
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Joel had something bothering him and he just could not figure it out. I gave him some simple street-wise suggestions and right away he told me it helped. Why does the PitBull ask me what I think of the markets 10x a day? Because he values my street-wise opinion.
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The point being, I’m not here to tell you to buy at this price or sell at that price — just like I don’t tell those guys when to buy or sell.
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I could, but you know what? I don’t want to help anyone lose money. What I’m here for is to help give you a feel of the direction. If I am right, you can do it on your own and apply that “market feel” to your edge and win big — you really can!
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Now some of you may be thinking, “that’s dumb, I can get that anywhere.” But can you? Look, I have seen people trade other trader’s systems and it just doesn’t work. They don’t execute it very well and that’s what I think we’d have here. Instead, I tell you how I’m seeing the market and where the big levels show up to me and that allows you to incorporate it into your strategy.
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You’re pulling the trigger, so you’re building confidence in yourself. I’m just your straight-from-the-floor market feel guy.
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One other thing.
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Over the years I have seen too many bad things happen to people that trade other people’s accounts. I know a guy on Twitter that was from the floor that totally BS’d this guy into putting $150,000 into an account and the money was gone within a few months. Then the guy talked him into putting up more money and then that money was blown out. To top it off, he never paid attention to the fees and the guy was charging him a really high commission rake and booked like $60,000 in commish.
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I have a rule everyone should follow: If you’re in a trading room and the guy that runs the room is making money every day, run if he wants to trade your account. I’m sure there are folks that are reading this have fallen prey to this and I’m sorry you did, but we don’t want this happening to anyone going forward.
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Our Lean
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Today is the first trading day of the new quarter and it’s a short trading week with the Jewish Holiday and Good Friday in play, along with the March jobs report. Unless something major happens, ‘thin to win’ should still be in effect.
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Let’s face it, we are in an uptrend but we all know how fast a high can come in. Go back and look at a yearly chart of the ES, which has basically been stuck in the same range for the last 8 months.
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Our lean is to sell the early rallies and buy the pullback or if you want, you can just buy the pull back. As for levels, outline is below:
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MiM and Daily Recap
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The ES traded up to 4098.50 on Globex and opened Friday’s regular session at 4090.25. After the open, the ES down-ticked to the 4088.50 level then rallied up 4101.50, pulled back a few points several times, then rallied up to 4121.75, exactly to where I said the upside stops ran to. After the high, the ES pulled back to 4112 and then traded up to a new high of 4136.50 at 3:40. then sold off down to 4125.25 at 3:45.
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The ES traded 4126.75 as the 3:50 cash imbalance showed $2.2 billion to buy, rallied up to 4141.25 and closed at 4138.50. It settled at 4139.50, up 57.75 points or 1.42% on the day.
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In the end, the rebalancers — with the help of hedges being lifted — pushed the ES up 200 points from a week ago Friday to last Friday. In terms of the ES’s overall tone, it was firm from the get-go with the largest pullback being about 10 points. In terms of the ES’s overall trade, volume was higher at 1.55 million contracts traded.
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Technical Edge —
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The S&P is riding high. So is tech. Those names continue to lead the market higher. An early week dip in the top names — AAPL, META, QQQ, AMD, NVDA, etc. — was gobbled up and the ensuing rebound helped drive equities higher.
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Now going into Q2, the market is…a tad extended here. I want to go into Q2 slowly and see how the next few days unfold. Let’s keep it simple with the S&P 500.
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Note: WYNN is trading significantly higher in pre-market trading, almost to our second trim target. If we open in the $115-$116 range (or if you want to do so before the open) consider taking the first trim spot in that zone.
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S&P 500 — ES
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Ended March on the highs & now up in 6 of the last 7.
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Key Pivot: ~4142.50
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Upside Levels: 4142.50 (last week + last month’s high), 4158-60, 4200
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Downside levels: 4118, 4100, 4060-65 (10-day, 50-day and 50% retrace → I would love to buy-the-dip here, but I do not view it as likely).
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SPY
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Key Pivot: ~$410
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Upside Levels (SPY): $409.75 to $410.25 (last week + month’s high, 78.6% retrace), $415
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Downside Levels (SPY): $407.50-ish, $405, $399 to $401.50
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SPX
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4110 to 4112 held like a champ on the upside. Now it’s the key level to watch on Monday.
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Upside Levels (SPY): 4110-12, 4150
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Downside Levels (SPY): 4078-80, 4050, 4012-4030
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NQ + QQQ
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Clearly the relative strength leader but after last week, a pause would be nice. The NQ held the 12,700 level, but is up 600+ from that point.
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The QQQ held the $306 level and was +$15 by Friday!
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So a cool-down here would give us the best setups, rather than buying the extension. #Patience
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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, AAPL, down to runners. Congrats, all. Great sequence!
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AAPL — Long from $157. Trimmed down to runner at ~$165 (or completely out).
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GOOGL for those still in — Trimmed ⅓ on opening push at 102.50. $104-$105 is next trim spot (likely down to runners if we see it).
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B/E stop.
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AMD — for those still in — 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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WYNN — Nice push on the weekly-up over $110.73 — Trading $115 to $116+ in the pre-market. Consider trimming ⅓ to ½ here (in pre-market or after the open).
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Can be down to ½ or even ⅓ if we make new 2023 highs over $116.50. That said, I would love to keep half and see if we can make a push for $120-$125.
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B/E stop.
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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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