Can We Get a Bounce That Lasts At Least a Few Hours?
Each rally has been sold. Another setup on NVDA.
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Our View
True story, I bought the early weakness and made money and sold the highs in the ES and NQ late and lost money because I was not honing my stops and got out too soon. When the ranges are narrow like they have been the last two days, you have to fade the pops.
This morning we will get a look at manufacturing PMI and the February ISM number at 9:45 and 10:00 a.m. ET, respectively. Note that both data points drop after the open and the algos love to “do a little dancing” on the headlines and run some stops.
Our Lean
It's 8:30 pm Tuesday night and the low in the ES is 3956 (Update: we’ve rallied hard off that number, with the ES hitting 3991 this morning). Traders are between a rock and a hard place with the S&P.
The trend has clearly been down, but the ranges are holding up. The seasonality stats for the first day of March are bullish and the index is short-term oversold (as it has declined in 6 of the last 8 sessions and the two “up-days” saw heavy fades from the high).
Even with the overnight rally, is it so hard to think that we revisit the Globex low — the aforementioned 3956 level — and last week’s low near 3950? And none of it really makes a difference if we break 3950 and can’t reclaim it.
Our Lean: