Micro Timeframe (30d:30m): Uptrend
- Major breakout that big players had to participate in
Futures
1st: Micro Reversal Intraday Reversal
1d:2m
- I was leaving for a trip at 11:30am so I wanted to get green and get out of the market as fast as possible. When we opened there was only a 3 point range on the /MES and that is the tightest range I have ever seen at the open for the SPY. I went short and lost 3 points and just left the market alone because I had to get ready to leave. I probably shouldve went long (easy in hindsight) on the data candle high and just sold at the breakout. I dont know how I wouldve held this move and trusted a massive trend day like we had but lets see the signs of possible trend day that I didnt pay enough attention to.
Breadth indicators
- The VOLD (left) was green at the open and if you look closely it was steadily increasing throughout the entire session with a small stall out above 3 near 1:00pm. This was not very telling of a trending day to occur but the way it was increasing throughout the day is pretty significant. If you look at this indicator often you will know that we do not usually trend higher after having a weak value at the open. Usually if we have a weak value at open we will just have a ranging SPY. These small nuances about these indicators is EVERYTHING. It is imperative that knowing these indicators inside and out and thinking about different ways to use them. Where was VOLD when we went to VWAP on SPY? Did it increase heavily and signal that sellers will not be able to push the market down today? If you dont pay attention to that stuff and you only care if VOLD is at 5 then you will not be using this indicator correctly.
- The ADD (middle) was somewhat flat on the day but the open price action on it is extremely important. We had strong buying right at the open and pushed right up into 2000 before pulling back and bouncing back off of the opening print value. This is very telling as well because holding the open print value is significant since that means that all the stocks that started green ended green.
- The TICK (right) was probably the best indicator of the 3 on the day in terms of signalling trend at the open. We did not hold below zero from the whole way from 9:30am open and didnt break down below zero until 12:30. That is extremely significant.
Sector ETFs
- These are the sector ETFs and are extremely important to pay attention to when understanding if risk is on or off.
- Unique ETFs that divide the S&P 500 into 11 sectors | Select Sector SPDRs
- If you pay attention to the opens on these tickers that is the most important part. The buying off the open from the offensives (bottom row of tickers) was very strong and the buying at the open of the defensives (top tickers) is very weak. Yes the defensives are still green on the day but the pressure of buying is the most important part because they will still move higher on a green day but will mostly look flat where the offensives should move higher in a clean trend. The left 3 tickers of the offensives are Consumer discretionary, Tech, and Communication services. These 3 all had huge buying at open and a big trend to the upside. Something a little more telling is volatility going down all day (signalling risk on) as well ad GDX (gold) dropping huge mid day. The trickiest part about the offensives is the fact that the semis (SMH) and financials (XLF) were not extremely strong. I would think that since semis are a sensitive sector in the market that on a grinding green day we should rocket higher all day. Same with Financials, they are so sensitive that they should probably be moving higher if the overall market was going to do the same. I have a lot of work before I can look at these sectors and intuitively know what is fully happening in rotation.
Nuance:
- Garrett Drinon on twitter said that AI was an interesting nuance within the ETFs that is a clear signal of Risk to be on since this is a sensitive sector in the market and when risk is on money will inevitably flow into this.
How should I have traded this day?
- I shouldve gotten long at the top of the data candle high and then added on every single damn dip. How is anyone supposed to know that this was going to just continue all day?
- This was a MAJOR breakout on the 30m chart. Yesterday we confirmed the breakout above the fed day high which was on 3/22. After confirming that and then breaking above the next lower high, we had a lot of room to run. The best time to buy and get in for trend days is when the bigger players have no other choice to be buying in. The breakout of 4082 we had clear room up to 4170 and which was the next lower high above. When we breakout of key levels like that and big players have no other choice but to buy you need to get in and HOLD.
