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Little update on the family hereā¦ after numerous tests and procedures we were able to get a genetic panel ran and we are looking at the possibility of him having an even more rare genetic disorder than his brother does. He would actually be the first of his kind to have this genetic disorder with his current presentation. We will be following up long term with genetics and many other specialtiesā¦ as of now we had the cleft (hole) in his airway repaired and it appears now to be healing well and possibly improving some of his breathingā¦ we went from 4L of oxygen up to 10L at max and we are now down back to room air. He appears to be much more comfortable than before. We are going to be taking him home tomorrow and as of now will be taking him home with a feeding tube and work on bottle feeds over time as he still has a very high risk of aspiration.
As of now since the rest of the family is sick I will be the one to go get him from the hospital tomorrow so I will be gone at some point tomorrow afternoon.
Tomorrow the slew of fed speakers continue but more importantly we have FOMC minutes at 2pm. As a friendly reminder minutes is just a full recap of everything that was said at the last FOMC meetingā¦
When we look at the last 12 FOMC Meeting release days there was a long time period where we opened red on minutes day and closed redā¦ Only 5 of the last 12 meetings have opened green and only 5 of 12 FOMC minute days have closed green. There are decently high odds of a red day tomorrowā¦
Which if you remember we are now on day 11 of the trend of reversing the previous days move. Meaning that if the day closes red we should expect the following day to close green.
What I find more interesting is that the post-FOMC minute day usually opens green with 75% of the days opening green. However, 50% of the days close red.
I donāt forsee markets really getting any news tomorrow from the minutes that would be market movingā¦ JPOW was pretty clear and upfront about the future plans and where we are headed next so I donāt see a reason to suspect anything alarming to come from the meetingā¦ the only thing that could be of note is the dot plot and how that was viewed by members.
SPY DAILY
The range continues to holdā¦ the bears made a valiant run at breaking that support yesterday but of course fell short. This led to today a new demand and support being put in at 567.83.
Now not only did we bounce off support and put that demand in yesterday but it was also a daily 20ema support bounce. Longer term this is a pretty long and big bull flag with a bounce off daily 8ema support todayā¦ while I would have liked to seen daily buyers here on SPY I would favor that this range resistance and triple supply from 572.98-574.42 will be broken tomorrow. I would not be surprised to see a breakout to ATHs tomorrow.
However, if this painless and directionaless trend was to continue we would expect a new supply to be put in and then by Thursday we would be touching that double demand area againā¦
SPY DAILY LEVELS
Supply- 572.98 -> 573.85 -> 574.42
Demand- 567.35 -> 567.83
ES FUTURES DAILY
When we take a look at ES here though we did see stronger daily buyers return. I think the last two days have been extremely interesting because yesterday we opened with stronger daily buyers with a green vix. That led to a red day and by EOD stronger daily sellersā¦ today we opened with stronger daily sellers and a red VIXā¦. Which then led to a breakout/ green daily close with stronger daily buyers by the EOD.
It has been quite some time since the daily buyers/ sellers were not in control. Right now whatever this algo is doing they have locked into the movement of the VIX and have found a new way to move price action that doesnāt involve buyers and sellers anymoreā¦
We also got a new demand here on ES at 5750 just above previous demand and support of 5743. This is now our 6th attempt to break 5743 that has failedā¦ this this closure over 5796 supply/ resistance with daily buyers once again once SHOULD expect continuation higher. However, this market has lacked continuation for almost a month now.
ES FUTURES DAILY LEVELS
Supply- 5796
Demand- 5743 -> 5750
QQQ DAILY
As we move over to QQQ here the breakout starts to be painted in a better light. NQ/ QQQ the last two days (even on yesterdays red day) has been far stronger than SPY/ ES has. On QQQ today we again lack stronger daily buyers which I would like to seeā¦ however, we have a new double demand/ support area of 479.7-482.12 to watch. The bulls also turned and confirmed daily 8ema to be support again.
Yesterday I mentioned that 487.42 supply was the key resistance to watch but that 493.46 was the real final resistance to watch. While we did breakout today over range resistance and supply I would like to see the close over 493.46 before I start to feel confident in a test of 497.71.
Outside of the pattern for the last 11 days it is hard to find a reason to be bearish hereā¦
QQQ DAILY LEVEL
Supply- 487.42
Demand- 479.7 -> 482.12 -> 497.71
NQ FUTURES DAILY
Much like on ES we have stronger daily buyers here on NQ even though we did not open the day that wayā¦ Now here we have a nice bounce off daily 20ema support with the 6th day of attempting to break through 19953 demand/ support. With this hard bounce off daily 20ema support and the now breakout over its double supply/ resistance from 20205-20241 again I find the odds of a continuation extremely likely for tomorrow.
I would like to see the bulls close over 20342 tomorrow to fully break this range and resistance. That would likely break tech out to its ATHs.
It is fairly clear longer term downside is limited until 19953-20017 is broken.
NQ FUTURES DAILY LEVELS
Supply- 20205 -> 20241
Demand- 19953 -> 20017
VIX DAILY
Something I find very interesting is that the VIX really isnāt unwindingā¦ if you think about it the VIX hit its recently low of 14.9 on 9/26/24. On the same day ES and SPY hit ATHs and NQ/ QQQ hit 493.7 and 20538. We are about 0.85% from that level on QQQ/ NQ and about 0.3% from that level on ES/ SPYā¦ However, if we look at the VIX it is 55.71% HIGHER than it was on the 26th.
Now what does that mean? Well it means that the VIX is rising while the markets are not droppingā¦ this is a lot of what I have been saying lately where the technicals donāt really make a whole lot of senseā¦ I cant really remember a time in recent history where there was a near 56% run on the VIX over multiple days and markets were essentially flatā¦ thatās not something we see very oftenā¦
Either markets are artificially being propped up and at some point the elevator cables gonna snap causing a pretty impressive correction lowerā¦ OR what ever fear it is that is driving the VIX higher and higher is going to subside and lead to a major breakout on the markets and the next bull market leg upā¦
While many people are bullish for tomorrow and realistically the TECHNICALS point to being bullish tomorrow tooā¦ I find it very hard to be bullish until we break this yellow bull channel AND close under daily 8ema support and realistically under that 19.2 demand area.
DAILY TRADING LOG
After getting shwacked yesterday I was able to mentally regroup and reset myself going into today. The one thing that kills most traders is greed. While I think its hard to call holding a play to full profit and full target being greedyā¦ it do think there is an argument to be hard that not taking profits to get a piece of the pie only is greedyā¦ the one thing that trading options and futures has taught me is that most of the time you will not be able to get the whole piece of the pieā¦ we as retail should be seeking out a piece of the pie only.
When I first transitioned over to futures I had a fixed 1:1 ratio that actually worked very well since my win rate on MOST days is 80% . Over time confidence and seeing enough of your plays run an additional 10, 20 maybe even 40 pts on NQ makes you think you should hold for the full go.
While setting a break even stop loss to ensure a winner doesnāt become a loser is a GREAT risk management strategy the one thing that I have always found for me is that there are usually more times where setting a BE stop loss results in that play closing at BE then it results in it continuing to push more and closing for a bigger move.
This market is all about (especially lately) mean reversionā¦ so unless you perfectly time an entry and catch the perfect reversalā¦ there is very good odds that you will find yourself stopped out on the retrace before the big move happens. Even the original stop loss at times are not safe from the reversion to meanā¦ this market is just brutal.
Today I made that adjustment setting ES plays to 5 pt stop and 5pt TP and NQ plays to 20pt stop and 20pt TPā¦Ā another thing I recognized and it is honestly just natural over time as you become more confident in reading bigger time frames (like 15minutes) is to move to smaller time frames like the 5min to find more plays and more potential winners.
While I humbly believe my strategy does work on a 5minute time frame which is shown in the last two months of successā¦ the one thing that happens when you trade a smaller time frame is that your profit per play decreasesā¦ for example (and I have researched this through my plays in the past so im not just making this up)ā¦ on a 15min long or short on NQ if I wait for my A setup on average using a 20pt stop loss my winners will see 30-35 pts of profit BEFORE a reversal happens. On ES its more like 7-9 ptsā¦
Now when we move to a 5min timeframe we MAY be looking at more like 15-20pts on NQ or 3-5pts on Es before that reversal happensā¦ honestly this is what has been killing me on the few red days I have had over the last almost two monthsā¦ I would ābe correctā I would say 80% of the time but what would happen is I would see that 20pt NQ and 5pt ES profits which trigger my breakeven and instead of just taking $500 on ES or $400 on NQ I would ālet it runā. While sometimes I would see another 10 or so points on NQ or 2-3 on Es before I closed out or felt like the play was overā¦ a majority of the time the mean reversion in this market took it right back to my BE stop loss before it would continue on in my directionā¦
Today what I went back to is my 15min strategy with a focus on finding that key entry that puts our stop loss below the previous candles lowā¦ or puts our stop loss below the EMA supportā¦ finding KEY levels to enter where yes we may see a small retrace before we see profitsā¦ BUT the level of retrace remains within an area that if it breaks then the play was wrong anywaysā¦ there is really no downside to this strategy outside of the fact that it takes patience and there is going to be far more times that we watch price action do exactly as we expected without being in that playā¦ however, I would call this my A strategy. Using this A only strategy allows for far less stress and more importantly no tilting and no revenge trading. When a play fails it just failsā¦ you didnāt get caught in a wicky reversion that makes no sense before it pushes exactly where you thought it wouldā¦
Remember (talking to myself and you)ā¦ slow and steady wins this race!
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