SP500 Futures Trading Plan for 6/14/24
Recap: In the plan I wrote that to trade support at 5417, I would want to see the market try yesterday’s lows and then recover at least 5421 if not 5425 to go long. This spot at 5425 comes from the yellow trend channel, and I said that “Most immediately, bulls need to defend backtests to the yellow channel while bears will look to take price back inside of there to slow some of the momentum.” There was an initial hold here by bulls and yields were supportive of a trade to the long side, so I entered long but cut the trade for a loss after it began to pull back after 30 minutes. Bears pushed price lower again into the gap that opened yesterday, but bulls responded quickly and were able to get price back above 5425, so I went long there. I exited in accordance with my risk management strategy and exited the trade at the next level at 5440. Unfortunately I made an error (misclicked something) which canceled my runner, though this trade was a strong one and more than made up for the earlier loss.
Balance/Trend: Today was a relatively balanced session, with action mostly contained within yesterday’s range. Bulls held the backtest to the yellow channel today, signaling intent to continue to push price higher at the same pace since mid-April. For now, the market continues to trade within the pink expanding range and will need to break out to continue higher through the green trend channel.
Analysis: After a strong reaction yesterday to inflation data, buyers and sellers are now engaging in the process of price discovery. Bulls have now been able to keep price above the yellow trend channel on two occasions and need to continue building value at these levels for continuation. Yields are now well off of the 50-day moving average as traders are pricing in two rate cuts in 2024, should inflation continue to come down without a pronounced effect on the economy.
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