January 5th, 2024

I’m away from the trading screens this morning, so I won’t be doing any intraday trading today. Here are a few quick thoughts before we head into the weekend. The NFP numbers didn’t alter the technicals in ES, and the overnight markets further confirmed my bearish bias.

I plan to maintain my swing short in ES until the target of the 4689 area is tested, or I notice a violation of the YTD VWAP or a close above the 5-day moving average. I’ve been scaling in and out intraday of the position as indicated in the charts above, but now, as we approach the target, I’m letting the little balance I have left go until the targets or stop is hit or if I find a reason to cover. Whenever we get close to a swing target, I reduce the size and stop adding because the risk-reward ratio is too wide for me to manage risk effectively.

Things to note: NQ remains the downside leader, having hit my initial downside target of 16,533. It currently stands below this target, bolstering the potential for ES bears to reach their 4689 target. If NQ manages to climb back above 16,533 today, it could instigate the bulls in ES, triggering a pullback. It’s been a slow and steady start to the year. As it’s Friday, and the end of the first week of the year, let’s finish the week on a high note. Have a wonderful weekend!

Cheers, DELI