ES Futures Market Updates and Trade Plans for This Week
Hello traders! We are coming off a massive week in the market fueled by a short squeeze that began with last Tuesdays reclaim of 5760 and continued on a staggering 250+ points after the presidential election in a few days of trading with virtually no big pullbacks or clear-outs lower.
As seen in the chart below, and as per last weeks newsletter, this 5760 push attempt needed to fail to move lower, and a recovery of this level could begin the short squeeze (remember, in a bull market environment practically every multi-day pullback is going to be met with a face melting squeeze higher):
In this newsletter, we’ll talk a few ideas for this week, and as we develop more levels during the week to trade from, we will have some updates for you going forward.
After a market move of this magnitude, its important to stay nimble and open for the days coming. As at these levels, chasing breakouts becomes problematic and risky, as at any point we could finally have a big clear out lower, which will likely present our next good buying opportunity and/or bottom bounce long setup. Any big pullbacks are going to be a good thing for this chart and help provide some new levels and ideas to play from over the next couple weeks.
Levels to Watch This Week
As mentioned previously, I wouldn’t put much weight in any levels above 5900-5950 as they haven’t been fully re-tested or challenged by the sellers yet. However, given the context of this chart, the best buying opportunities are likely to come from breaks of the below levels that are then recovered with shorts trapped.
My interest mainly lies in pullbacks that are going to create buying opportunities over the next week or two. However, its important to be nimble in this market and not too eager to buy dips as the first time that multiple days worth of longs start taking sells, whether its technical breakdowns or a an economic catalyst/news, things can unwind quickly.
6019 - A break of 6019 is a trend break that could trigger some weaker hands to sell and take profits. Keep in mind, the next level is very close below.
6009 - Just 10 points below the trend break at 6019, was our last resistance area from Thurs Nov 7th, which became support on Friday triggering the next leg up to 6040. A break of this level followed by a reclaim of 6009 could be worth a look for a long / bounce play if the context is good intraday (extended from multiple time frames EMA’s on the break giving better chance for a short term bounce vs a slow controlled grind lower). Panic sells with extensions typically provide the best buying opportunities when met with a good intra-day setup to confirm the thesis. However, if this level breaks and we see continued weakness intra-day, watch for the levels below.
5990 - This is my favorite nearby level, its Friday’s low. A break of this level should shake out longs who chased the move Fri up to 6040 and potentially provide a failed breakdown and reclaim for a long opportunity. Ill be watching close for signs of a setup if we break this level this week.
5920-5950 Zone - If we get a bigger correction, this is definitely my favorite area of interest. 5920 was our previous all time high before the squeeze on Tues/Weds of last week, and this area has not been re-tested since. This will be a big battleground for bulls and dip buyers if reached.
5900 - A break of 5900 is about a 50% retracement of this big move and would be a lovely shakeout to then look for a recovery of 5920 for a “reset” and continuation higher. Here are the levels on a 4HR chart overview:
Final Thoughts for This Week
As mentioned earlier, this week we need to remain nimble. Longs are still trailing winners up here and shorts are still beating themselves up trying to pick a top. Buying breakouts gets riskier and big follow thru up here is less likely until we shake out some weak hands.
Any catalyst to provoke some selling could cut through some of the above levels, so its important to be present during those dips to gauge market reactions to those levels and make informed decisions intraday.
As always, for detailed live streams and trade alerts for intra-day setups and multi-day swings, check us out at Livestream Trading and get access to daily recorded webinars, trade recaps, and trade plans each night, as well as our live chat room and live stream.
Once we have some levels re-tested this coming week, it will become more clear on which levels are acting as bigger picture supports and resistances, and trading will become a bit easier. In the meantime, be patient and let the market come to you.
Have a safe trading week, we will check in with setups and trade plans as things unfold this week.