January 26th, 2024

As we close out the week, we find ourselves in the same market environment as we started. The bulls are in complete control and they continue to defend the 5-day SMA and push towards upward targets (ES-4974/NQ-17,777). The bears keep attempting to pull back the market, but it simply presents another buying opportunity for the bulls.

Due to the market losing momentum, the 5-day SMA remains a crucial area to monitor for our upward trajectory towards the 4974 target. The bulls don’t require momentum or volume, despite what some may say. They just need to maintain their defense of key areas, keep volatility low, and we will reach those targets.

RTY is striving to catch up, but it is not a favorable market to trade at the moment. In any bull trend, I prefer to trade the markets that are leading the rally rather than the ones playing catch-up. Day traders have a better advantage in trading the long side of the markets that are leading the rally.

The 10 YR is currently in wait and see mode for the Fed Meeting next week, and I doubt they will make any significant moves that would derail the rally in ES and NQ.

As my dear friend PAX says, it’s Capital Preservation Friday, so let’s not allow today to ruin our weekend. Stay small and trade smart, everyone.

Cheers, DELI