Macro micro trader

Humbled again! Just when you think you got it figured, just when you think you got your edge, just when you think you know this game, market does what it does best – changing the course of the game. I had expected markets to have bottomed out sometime lats week for the rest of the year based on the premise that 200 weeks MA and 50 months MA would defend their respective turfs powerfully with that bounce early in the week. Of course we haven’t yet broken the lows yet, but the way markets fell post-NFP and continued to bleed, it won’t take much time for market to break recent lows and dip further. Let’s take a look at where we’re headed now.

ES (weekly): While last week was difficult to trade as it bounced off the 200 weeks MA at the start of the week and yet post NFP the sell-off appeared to break those lows in the forthcoming days. At current price the risk reward has turned very dangerous to go on the short side and yet one can’t go long given the theme is still favoring bears.

ES (Daily): While it should have been a no brainer to be on the short side once ES retreated from 20 days MA, but we missed as I believed higher time frames are turning positive. But only if it was as easy ]as it seemed.

ES conclusion: At current price, we have no position and it’s risky to go short and going long considering 200 weeks MA and 50 months MA has only turned all the more riskier as we saw last week. As of now we are on wait and watch mode and until we see significant bounce yet again, at least on 4H time frame, it would be risky to go short. Although my target still remains 3400, pre-covid ES high (3397 to be precise).

NQ (weekly): 200 weeks MA given up, it is holding threadbare above the weekly demand of 10968, but consistent onslaught by the bears is now making it weaker and don’t be surprised if it breaks down.

NQ (Daily): Here again, 20 days MA was a no brainer to go short. We missed.

NQ conclusion: No position and not going short yet, we either short below the weekly demand of 10968 (if sustained for at least a day below it.). Till then we just wait and hold our hands tight in the pockets.

YM (Weekly): Broken off the 200 weeks MA and the weekly demand too. One of the weakest out there and one would be wise to stay short the YM as against the ES and NQ.

YM (Daily): We would just wait for the right opportunity going short the YM. Probably some bounce on the 4H would be right thing to do so.

YM conclusion: One of the weakest out there and would be the first that would provide us with good risk reward on the short side.

RTY (Weekly): While we kept our eyes on all the other charts, especially lower time frames (1H and 4H) all of last week, what I missed during the week was right in front of the eyes – RTY sold off the 200 weeks MA, along with 20 weeks MA and 20 days MA – All in all, the best short out there hidden in plain sight, only if we paid enough attention.

RTY (Daily): Even on the daily, until Friday bulls tried all their means to cross past the confluence of all these key MAs and gave up. We’ll get our opportunity again to short the RTY.

RTY conclusion: RTY is the weakest link now in the pack and it shouldn’t be a surprise to see bears attacking all those small/mid-cap stocks hard. I would initiate short position soon enough.