PS. Referring to resistance on SPX, how wide is the band? A supply zone stretches into 4,000. How wide a stop should be?

I am not willing to short /ES at the Friday’s close because I am not willing to risk 100 points going against me even on /MES for a drop of 50 points. The R/R ratio is just not worth it.

Randy,

Thanks for responding in earnest. I prefer to swing trade — holding a day job does not leave me with much other options — yet yesterday was such an exceptional day with swings in both ways. I am referring to the after-hours market on /NQ and /ES. Making some 20 ES points per day is my aim. Or making 100 ES points per week in one day, as the market may give us.

I was viewing this from the futures market perspective. Most of the action happened after hours. /ES hit a support of 3775ish, while /NQ was shy of its support of 11770ish by about 150 points at its lows. That was a fast move. i wanted to capitalize on it yet I was not prepared to see 200 /NQ points against me: I am left with a small account after big losses this year.

What you said about QQQ is correct. The trend was down going into Friday morning on QQQ, yet the trend was up on /NQ following a recovery after earnings. Momentum traders — I follow a couple — were inclined to short an initial bounce yesterday after the opening. I did not yet I did not have a conviction to go long.

There is a fairly liquid futures market, and big banks that move the market trade it. The whole move up after a reversal last week is happening on very small volume, as I am told. I concede that institutions (not banks) cannot trade after hours, yet do that move the market?

Anyway, I misread the whole thing by looking into 15-minute charts. Even on 60-minute charts /NQ made a lower lower, while /ES did not. I was wondering whether /NQ was an early harbinger of a reversal or just different. /YM did its own thing altogether.

For the most part, there are two reasons (objective entries) when I short: 1) A breakdown below support and/or a bearish chart pattern and 2) A rally into resistance, especially during a counter-trend rally.

Do you mean “..post updates for quick day trades?” Occasionally I do that but mainly swing & trend trading ideas & analysis that pertain to those longer-term trades that are measured in days, weeks, or months (not minutes or hours, like day trades). Please LMK if you meant something else.

Not really a bear trap today as the market never broke below any key support level. On the contrary, it successfully tested & then rallied off the key QQQ 269 support after AMZN & AAPL earnings in the post-session last night & only climbed from there. 269 was the mid-June low (previous bear market low) that was briefly taken out in what I would say was the most obvious bear trap in many years once 269 was solidly recovered the following week or so later.

Last night was a good example of what I often warn about (and repeatedly warned about leading up to AMZN & AAPL earnings): Not to read too much into the initial reaction after a big earnings report and as importantly, wait to see that the market does the following day as that’s when the starters (institutional investors) step onto the playing field. It’s not that institutions can’t trade in the AH session, just that they can’t effectively trade due to the relative lack of liquidity & difficulty trying to trade fast-moving stocks using limit orders. AH is typically the realm of the retailer trader & what happened last night followed by today is a great example of that.

Also, do you post intraday updates for quick day here? I was looking for updates from today on what looked like a reversal and turned out to be a bear trap. I am new here.