10 July Recap

Quite the divergence, but ES is on track

Tale of two markets today as ES was clearly in the stronger GEX position, and still is.

NQ had a quick opening drive down after wicking some unfinished business on a previous swing high (NQ loves to do this at open—however, it extended right down to the multi-day rotation POC, unfortunately didn’t split my position and took the modest TP at the pivot). As we’ve mentioned before, you can use correlations to decide if it’s a quick hit and run or a longer hold.

ES simply accumulated around VWAP, building a base at 6300. After a quick ‘look below and fail’ of the 24H VWAP, we formed a solid rejection and it became clear we’d target the weak high above, and there are potential rebid opportunities going into the afternoon (attached).

There was also a distinct offer pull right at the weak high at 6315 which cleared the way for buyers to run up.

0dte positions have rolled down slightly on SPX, with Call Resistance sitting at around 6337 currently. Looks like we’ll challenge the ATH. I’d be wary of holding this one though, as we have 30Y auction and Fed speakers coming up, and, we may see a poor high left on ES, to match NQ.

Bit of a confusing situation at open, but if that happens, usually best to sit on hands and just wait to grab your slice of the action

Trade Safe

-Z

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