SPX 3 day average continues – 40 points and the grind returns
Ahoy there, Trader! ⚓️
It’s Phil…
Another fun day’s trading, with most of the action once again happening in the overnight session, with a little spill over into the regular session.
The excitement over the volatility expansion has ultimately vanished quicker than a blind trader’s stop loss after a Jim Cramer pump.
Right then, let’s get into the charts.
Market Snapshot – Small swings, sput sput fizz, and the big move still isn’t happening.
The volatility expansion lasted 1 day. A review has been ordered, and its findings will not be published.
The 3 day average on SPX continues to contract, and be small like 40 points small.
Now don’t get me wrong, there are still intraday profits to be had and small swings are developing. We are just not seeing much more than sput sput fizz on the majority of the moves. Swinging for a big move and target just ain’t happening. Yet!
VIX attempted a nudge above 16 yesterday on a very brief but welcome spike in price that also fizzled out fast.
- ES 7,686.50, -0.06%. Grinding.
- YM 53,686, +0.08%. Sat right on the NATHs.
- NQ 29,208.75. Still the weak one.
- RTY 3,012.6, -0.05%. Nothing doing.
- VIX 15.69, +1.49%. Went for 16, didn’t get there.
- GC 4,676.4, -0.84%. Off the highs.
- CL 80.04, -1.32%. Back at the big number, see below.
- BTC/USD 78,515.19. Failed to follow through, see below.
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SPX – Bullish, boxed in, and patience is your friend.
SPX swings remain bullish, and the PnF chart showcasing its usefulness with a clear barrier at the 7680 to 7700 zone.
We’ve already noted the regular charts as being in a range, but no matter which way you look at this we are once again stuck in the grind, and patience is your friend.
As I’m typing this there is little to no overnight movement so far, and a small red flag news item at 8:30 EST could get things rocking and rolling.
Bullish, boxed in, and waiting.
Crude Oil – Back at the number it keeps coming back to.
$80 has been a significant number for crude all year, in the sense that price keeps coming back to look at it and then leaving again.
CL, crude oil, is dropping nicely back to the $80 level. This has been a pivotal level many times this year and makes for a great assessment level for the next something to develop.
Back at 80. We know this spot.
Crypto – Went up, looked at what it had done, and put it back.
Bitcoin went up, looked at what it had done, and quietly put it back.
Crypto’s BTC attempted to push high and has failed to follow through. We now see a daily rejection type of bar and a Pinocchio setup could be on the table.
A move back into the red zone for me will trip shorts, that’s the zone up at 80,000. Or below the prior inside bar’s low. Not the ideal entry, but the rally to the red zone may well not happen.
Targets are 71,500, the 50 to 61.8% retracement zone. Although a quick look at the PnF chart shows that we may be developing a quite large, or larger, consolidation area, and possibly could nudge back towards the 64,000 zone.
Rejection bar, Pinocchio setup, and two ways in.
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Premium Poppers – One had nothing. The other had news.
RUT didn’t quite develop a setup and meandered sideways after its opening push. Sidelines is where we are supposed to be here.
SPX saw a fast 1st breakout and, boosted by a little news, hit the targets quite quickly with the directional move lower.
Of course the AntiVestor community was “all over ‘dat”.
- Bill B. “Got SPX 1BO for 75% profit.”
- ehvpsd “Quickest trade ever, SPX 7680/7685 bear call, closed in a minute for 50%. Amazing…”
- Greg D. “Got SPX 1 BO for 50%. Closed right before that big spike bar.”
- Scott K. “SPX bear spread on 1st BO, closed for 47%” and later “Decided to take another SPX bear. It seemed to be testing the 1 day VWAP around 11:30. Sold at $1.10. It meandered around for an hour and a bit, but finally hit my TP at $0.55 for 50%”
- ehvpsd “I took a second one this morning. I made the mistake of setting my stop too close, and got closed out before it had a chance….Lesson learned, not used to trading SPX 0DTE…”
That flush down was a nice speed bonus. And on the second one, small lesson, you’ll get used to it. Get those reps in and you’ll be good.
A minute to 50%, and one lesson learned the honest way.
Fun Fact
Since a Pinocchio setup came up…
The name is not decoration, it’s the mechanism.
Martin Pring called the pattern Pinocchio in Technical Analysis Explained because it lies. It lies about the market direction, and its long nose exposes the lie. The bar breaks the highs or lows of the move, pulling in the breakout traders, then breaks back into the range of the prior candle and traps them.
So “pin bar” is just shorthand. The full name tells you exactly what the bar is doing to somebody.
Meme of the Day:
Happy trading,
Phil
Less Brain, More Gain
…and may your trades be smoother than a cashmere codpiece
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