ES1! Midweek Update

Steversteves Updated   
CME_MINI:ES1!   S&P 500 E-mini Futures
So I am posting because I am participating tomorrow.

Lots to unpack so let's get into it:

SPY broke and closed below the bearish threshold yesterday which leaves the condition of around 424 on the table to be hit tomorrow. We are seeing futures right now come to complete the move.

But don't get too bearish. At this point, tech has bottomed short term, imo.

Above is NQ's chart. You can see we are approaching the bottom of the math range. Range exceeding happens, but as you know (if you follow me), it requires a catalyst generally as it happens around 12% of the time for ES and NQ.

MSFT, NVDA, QQQ and NQ (as you can see in the chart) all bottomed in their mathematical low range. MSFT, NVDA and NQ are incredibly loyal to this math range absent weeks with major catalysts. We don't have major catalysts this week, so I am no longer incredibly bearish on any of this.

SPY / ES1! fought like an SOB to maintain bullishness towards EOD. It did fail, but, as they say, its the thought that counts. I expect the basic move to be completed (SPY to around 424) and then I really do anticipate it to just bounce from there, or at least attempt to and maybe grind. The sell was led by tech, the obstinance led by the financials and oil sector and we are now at a juncture where tech really shouldn't technically sell too much lower for the week and this will give the S&P some breathing room.

The levels to watch are in the chart. The bottom level is the general expected move with a break and close below the bearish threshold on futures. If we do see some serious bearishness kick in during the overnight Asia/Europe session, we should ultimately look to this area to find support. Otherwise, I expect support to be found really before this level and I do expect it to either remain stagnant or push back up towards those high targets.

The other thing is, the probabilities are not at all convincing of a short tomorrow. Today, they were VERY clearly bearish, like super clear. Tomorrow, they are actually very not bearish at all. Like in the 0s for the very low targets, whereas yesterday the prob readings for lows were around 94% and for highs around 22%.

So the bearishness we are seeing, imo, is just the conditional case being played out of a close below the threshold levels. After that, I really wouldn't get overly zealous shorting. Which means, if we open in this range tomorrow, as a day trade I would lean more to the bullish side of things.

But all in all, the setup is not very clear on ES1!/SPY. Its actually pretty obscure. So its not really on my playlist for tomorrow. I am watching RTY/IWM. We have around a 77% chance of IWM retracing to 185 and below within the next 2 trading sessions. RTY is holding off the bearishness somewhat currently, but we will see where it opens. Here is the chart for RTY:

The numbers in the chart correspond to how many Standard Deviations away from the mean those targets rest on the daily timeframe. You can see it is getting a bit over-extended.

For you NQ traders, here are the targets for the day:

I am in no positions as of now. I was going to short ES1! for the continuation of the down move, but with the probabilities being so anti-bearish, I just figured I would wait to see where we open tomorrow.

Wanted to share my thoughts because things are getting interesting right now and they are a mess and they are misleading, so please be careful.

Safe trades everyone!


Well this day seemed to have played according to probs.
Tech had in fact bottomed short term, IWM did indeed go sub 185, ES was in fact not bearish and I think those were the extent of my wild claims haha.

Will have to see what the numbers say about Friday after everything closes.

Hope you all had a great trading day!
So I ran the data for tomorrow. Technically (Based on the technicals alone) ES1! is bullish. However, momentum and the current distance from the mean put it into the bearish category.

I was taken aback but a look at a huge gap up, but realized ... contract rollover. What a mess. I hate when that happens because it always throws me for a loop.

Anyway, the most persuasive play as of now IMO is tech. I don't have a prob model for NQ1! but based on the distance from its 14 day daily mean and its relationship to its weekly math range, NQ is the most persuasive for a long.
I am not into shorting right now because the market is hands down bullish. So I will be leaning to NQ and tech. Here are the levels to watch:

Fridays are traditionally bullish so focusing on the bullish side of things. With NVDA and MSFT being pretty hammed down to their absolute bear low targets on the weekly, I suspect further upside is the safest bet in tech.

IWM/RTY is a bit on the iffy side as IWM technically satisfied some bearish conditions today. But I see the market isn't following through with bearish conditions alone anymore like it used to, which indicates there is a great deal of euphoria in the markets. I can't compare this to anything else, because conditions are a Steven Invention of 2022. So I truly don't know how these behaved in 2021/2020 aside from theoretical backtesting.

These are my thoughts. All in all, my outlook is bullish.

Leave your thoughts below!
I don't usually like to update these ideas so excessively as they become on unreadable haha. But just going to close this off.

So as anticipated, we did see a bit more of a bullish day with tech than with the S&P, but equally held true to a bullish undertone with more of a bearish pull. We didn't get an EOD rally which were probably those more bearish probability readings poking through.

Going into next week, preliminary assessments remain on the bullish side. I will do a post over the weekend about next week thoughts and will resume my normal posting routine (Monday video, etc.). We have some interesting put activity happening on SPX, but otherwise the bullish bias is still poking through in the data.

We have some major catalysts to be prepared for next week, so be ready for some wild PA in both directions. We should get more follow through next week, at least I am hoping.

As of now, wishing everyone a happy weekend! Hope you are all finishing with a good week, if not don't sweat it, we'll get it next week :-).

Take care everyone!


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