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The ‘Buy Everything’ Rally – Jan 4, 2020

MARKET COMMENTARY -Newest gamma levels and option call sellers show us a press into 3834 as a strong potential target this week. Bitcoin exploded over the holiday and brought gold with it. As long as the dollar fades, commodities priced in dollars will rise as it will take more dollars to buy them. Gamma levels remain noisy all the way up to 3782 in the ES_F for today’s trading.

If you are newer, read The OODA loop. If used properly, it will confirm you are seeing things the right way. It is far better to be out of a trade you wish you were in than being in a trade you wish you were not. Stay present and in the near term, and pay attention to the players before you decide on a plan. BE PATIENT AND WAIT FOR YOUR PRICES to give you the edge. Intraday formations are the ones governing the charts – so use them.

The ES_F held higher lows yesterday and now sits above the gamma level of note today at 3766. Breakout levels today are above 3776.5. Buyers are still in charge, but if the call wall signals the end of the move, we could easily fade south. Setting trades long at support regions remains the highest probabilities for all our indices. Only after seeing a failure to recover support should we be bearish. Remember to wait for price action to tell you what is happening.

**Buyers are in charge but they will be willing to give back gains to build strength at deeper support levels in the rise forward. Pay attention to the VWAP. Once we drift below that line intraday and fail to recapture it, sellers will be bold in their attack to drive prices deeper.

The NQ_F also held higher above a call wall still showing up at 12990 and option call sellers are over 13036. Setting trades long at support regions remains the highest probabilities for all our indices. Only after seeing a failure to recover support should we be bearish in our approach to trade positioning. ZONE IN ON ARGUMENTS AT THE VWAP. They will determine future slope and direction. The internal participation levels continue to be mixed here so new highs within the index seem to be fading in some places while holding in others.

PAY ATTENTION TO YOUR STOPS.

The CL_F and GC_F are both at the whim of the dollar traders as these two instruments are priced in dollars. As the dollar fades, it will take more dollars to buy the same amount, and this will look like a rise in the price of the instruments. This relationship sometimes disconnects sharply but for now, it is running tightly within its inverse relationship.

Watch the VWAP to help you with the strength of pressure. The loss of the VWAP will force some selling action, and the breach above the VWAP that holds will bring buyers to attempt stronger positioning.

INTRADAY -Keep an eye on the daily resistance and support that we discussed and expect battles at these regions as buyers have a lot to prove to maintain bullish price flow on monthly formations- technical damage is present but likely to be repaired on this large time frame. BIG time frames will help you position with the wind at your back.

Deep dips remain staging grounds for buyers- quick strikes to support and back to resistance appear to be the highest probability for success today- dips could certainly get deeper and spikes could get higher as price action shifts.

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This week’s calendar

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Econoday Calendar for this week

********If you feel you need some help understanding how price moves, remember you have the COACH’S CORNER for video review.

THINKORSWIM USERS –Chart share links for ES_F , NQ_F , YM_F , CL_F , GC_F – levels here for download to the ThinkorSwim platform

LINK FOR THE TRADING DATA EXCEL SPREADSHEET

TRADING LEVELS-

If you find yourself being chopped up, widen your time frame or take time away from your screens. This is a time when less is more.

TRADING VIEW & ACTION PLAN
Pullbacks can be deep. Buyers are still in charge. Gamma flows suggest a test of 3740 (completed tonight) and support shows at 3687 for the ES_F.

Intraday LONG trading from support edges like ABOVE the VWAP or tight moving averages will give you the least risk event for engaging – removing your trade at resistance will allow you to participate – understanding that countertrend bounces can be swift and sharp but will likely fail under the broken structure of the market.

Intraday SHORT trading from resistance edges like the old highs or bigger moving averages will give you the least risk event for engaging. Follow the candle trend until candles stop breaking higher.

Here’s a link to the METASTOCK software– you can have your own copy of Metastock to run these tests and setups using Target Rich Trades.

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Target Rich Trades from MetaStock-ES_F

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