-Macro Downtrend
-Micro Downtrend
.
-Daily uptrend (so far) but more likely to be at least consolidation
BULL CASE
-There is potential for a decent bounce today where the bulls take over a little bit. We saw a huge distribution yesterday where we couldnt break lows but we also couldnt move higher. Possibly we are setting up for a nice green move. I will be willing to go long only if we see massive buying and we sit above 414.35 with zero resistance. Even then though I really should not go long in any scenario just because the Micro Trend is down and my goals for this week is to never fight the micro trend.
BEAR CASE
-More likely than not we will probably fail in this area, although I would not be surprised if the SPY moves in either direction today. I want to try to find the easy money and the best entries that give a high % win rate. Those entries would exist in going short when (and only when) we can get a break down through 412.40 and see continued selling throughout the day. If we get a strong move to the downside quickly at open then we could see a market open supply zone short scenario where I can catch late day pushes that fail at resistance.
I must be ready for either scenario to play out
-Scenario 1.
Bulls take over once we break lows and they push the SPY very fast through the opening price. This could be a nice long but even if this happens I will not take the trade. I would rather stay away from any long no matter how pretty it is just because there is really no scenario where a long trade is "easy." They all get sold into and are extremely choppy whereas the short trades just fly right down with no big fakeouts.
-Scenario 2
Bulls buy at the open and we find resistance near one of the same selloff supply zones from yesterday and we get a big false breakout to the upside. This is important to note that if we do push early and fail it most likely will not continue higher
-Scenario 3
It would not be unlikely to see some strong consolidation continued from yesterday as well. In this scenario I would love to see bulls push early after a quick selloff then find strong sellers near resistance from yesterday.
-Scenario 4
This is the best case scenario for a high probabiltiy trade. If we do selloff quickly at open and break through premarket lows with no bidders then any pop could be sold into with big size.
-Scenario 5
This would be the worst case scenario for a daytrading perspective because I am not going long today no matter the circumstance and if we get strong buyers at open adn then we hold above premarket high and the opening price then it will probably be hard to short unless we get that late day move which is usually very tricky to capture.
Scenario 4 is my best case scenario, but I do think that scenarios 1 and 2 are the most likely to occur just from the fact that we had strong consolidation yesterday combined with a huge demand zone in this area from the previous rally that we had for the last month.
