November 29th, 2023
Grind Mode. US Indexes are in this slow, methodical move higher mode again. With a 2 YR printing its lowest yields since July and the 10 YR printing its lowest yields since September, stocks remain in favor. This is not the ideal tape for day traders as the VIX sits on lows, and we’re just in grind mode higher. Some or all of today’s move may have already been done in the overnight session and you have to be very patient and have the understanding that you just may not get many day trades in this environment. When I look at the daily charts, I see a tape that should have probably rotated a little bit lower in the previous sessions, but because of rates dropping and a low VIX, we just grind higher. I am staying away from ES, NQ, and RTY today as I see no edge to day trade this.
What is interesting to me right now is Crude Oil. When I look at Crude Oil on the daily charts, I’ve been waiting for an opportunity to find some longs as the Daily chart gave me a buy signal a couple weeks back, but yet we’re chopping around the 5-day moving average and just disrespecting my levels. Yesterday CL closed above the 5-day moving average and above daily support at 76.63. I am now looking for swing longs up to 81.86 in the coming sessions. Today I will be focused on the buy side and will look to buy dips leaning on 76.63 support. My hard stop will be just below 76.00, and I will look to carry positions overnight until we test 81.86 or I see a close below the 5-day moving average, which currently sits at 76.15.
CL may be too big for some of you to trade, or it may be a contract you have never traded before. If you’ve never traded Crude Oil before and it is of interest to you, I would suggest looking at Micro Crude (MCL), which is $1 per tick before stepping into the big contract. I also like CL Event Contracts today for the market to close above 76.50. I will use these contracts if the market pulls back to these areas, as I won’t pay more than $11 for an Event Contract.
If you’re trading ES, NQ, RTY today, just be small and smart, and make sure you have multiple confirmations on your day trades.
Cheers, DELI
