Market Context and Framework
- Cycle Day 1 (CD1): Initiating a new 3-day cycle, CD1 typically exhibits a decline, with average ranges projected at 6066.75 – 6063.50. The probability of declines >10 points is 79%, and >20 points is 56%.
- Prior Session Summary: A strong CD3 rally delivered 233.50 handles, significantly outperforming historical averages with a 287.34% range extension.
Key Market Scenarios and Trade Levels
- Bearish Scenarios:
- ES (E-mini S&P 500): Sustained offers below 6100 targeted 6080 – 6075, with the 6075 target fulfilled early in the session.
- NQ (Nasdaq 100): Bearish offers below 22050 achieved a lower target of 21957.
- Bullish Scenarios:
- ES rebounded above 6100, targeting 6113 – 6115 for further upside. Price action and market structure required reclaiming and holding key pivot levels like PH (Prior High) and VWAP (Volume Weighted Average Price).
Trade Execution and Performance Highlights
- Open Range Shorts: Initial trades aligned with bearish scenarios, fulfilling multiple short targets early.
- Reversal Plays: Buy responses at key support levels (e.g., VWAP, Open Range High) supported intraday recoveries.
- Playbook Trades: Notable setups included the Discount Xtreme and PKB Short, with supporting screenshots shared for educational purposes.
Market Dynamics and Strategy Notes
- Volume Conditions: Holiday trading dynamics prevailed, with reduced activity as decision-makers were on break. Traders were encouraged to stay disciplined and aligned with the dominant market force.
- Technical Indicators:
- AD Line and Ticks showed resilience, aiding bulls in maintaining control during the session.
- Cycle analysis remained accurate, with the session’s LOD (Low of Day) matching projections at 6063.25.
End-of-Day Insights
- Closing Conditions: A significant MOC Sell Imbalance of $1.2 billion reflected end-of-day bearish pressure.
- Cycle Prep: Traders were reminded to review cycle spreadsheets sent by 5 PM for planning the next trading day.
Shared Resources
- Glossary of Trading Terms: PTG Glossary.
- Mark Douglas Training Videos on Trading Psychology:
Summary
The day exhibited characteristic CD1 dynamics with a bearish start, intraday reversals, and a slow grind higher. PTGDavid emphasized discipline, alignment with market forces, and continuous learning through shared playbook setups and trading psychology resources.