earnings pain ahead? ☠️

Morning team.

We’re back again with another market brief to get the week started.

In today’s post we get you up to speed on how to trade the futures market this week, so let’s get into it…

Impact Snapshot

  • S&P U.S. manufacturing PMI climbs to 6-month high

  • Earnings:

Market Evaluation

A big day ahead of us going into tomorrow with some big tech earnings coming up.

Markets had an eventful start to the week, with just enough optimism ahead of Big Tech earnings reports to help the Nasdaq close higher for the first time in five sessions.

Treasury yields retreated from their highs giving some room for the futures to run.

We will monitor the big earnings after the close as well as going into tomorrow with META and IBM reporting as well as the new home sales and Powell’s Speech.

Markets Breakdown

Monday’s session was a perfect example of a market getting way ahead of itself without any solid confirmation of downside continuation.

Our morning brief spoke about a potential short-covering rally which was the exact scenario that played out the moment the market started a re-claim of the previous settle.

We’ve talked about the 3-day balance area and the market’s ability to hold this exact zone once it broke out of the previous balance and both Friday’s session and Monday did just that.

Again, we focus for the overlapping value areas and not price. A lot of momentum traders simply focus on price, this is exactly why they’ve gotten way too ahead of themselves on yesterday’s session and had to cover their short that fueled this upside.

If market has enough strength, this area will act as the pivot zone to aim for continuation back above 4300s.

Our points of reference managed to catch the whole session with the first support zone acting as the absolute bottom and after a good re-claim back towards the settle, the first resistance was the top.

We don’t chase price. We simply plan ahead and have our points of reference and when the trade comes to us, we execute with enough confluence.

ES

The key point we’ve made in our morning brief was the ability for price to secure 4276 as the first upside continuation target. It still remains as the objective for the day. The goal is to remain within the previous 3-day short term balance range in order to find strength for upside continuation to re-claim the 4300s. Read today’s brief here. 

The targets we look for until NY close & Targets to pay attention Tomorrow:

  • Upside Levels: 4276/4292/4302

  • Downside Levels: 4241/4221/4202

That’s all we got for you today.

Happy trading out there!

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We’ll see you Thursday.

-The QuantVue Team