February 20th, 2024

Teetering: The market has been showing signs of weakness for the past week in ES and NQ, but there’s been no follow-through to the downside. This makes the signs of weakness false signals and buying opportunities. Will it be the same today? I don’t know, but let the market guide us through its actions.

Key levels to watch today:

ES 5015-4995 is the battle zone. I have my Beacon levels, 5-day SMA, and important VWAPs all in that area. You can see in the overnight action there’s no hurry to get outside that range. This morning, if we start to push outside of that area, I think the bulls or the bears will run with it. Below 4995, I start to look short on a swing basis, and targets would be 4891-86. A daily close is key for me and trailing stops above the 5-day SMA. A push above 5015, I will look long intraday up to 5030 and then possibly 5050. I included some 0DTE ES Gamma levels from our friends at MenthorQ in the chart today.

NQ key level is 17,680. As long as we remain below that area, I am looking short. This morning in the pre-market, I bought some puts expiring at the end of March. I am short on a swing basis looking for a possible test of 17,340 area. Along the way, I see 17,633-600 as support and then 17,565. If we push through there, I could see selling start to accelerate. If we remain below 17,680 after the first 30 minutes of trade today, I will look at some 17,600 NO Event Contracts. Above 17,680 I am cautious about being short and the bulls can take us right back up to 17,775-800 where they will be tested again by the sellers.

Additionally, we’re hosting a PYT trading challenge using the new $100 event contracts starting next week on Feb 26th. I will be doing a live trading/mentoring session with the top three winners. Here’s the link to register for the challenge: https://placeyourtrades.com/02-26-2024-predict-the-close-challenge/ This is a great way to try out these new event contracts, which I believe are a valuable tool for day traders and are much better compared to when they were at $20. I am excited to work with the three winners.

RTY is a no trade for me. The tape is searching for leadership and it just can’t find it. Rates are coming down a little bit today in the 10 YR, but overall, it looks like rates will continue higher in the short term on the charts. The action is in ES and NQ right now, so that’s where my focus is.

NVDA is coming out Wednesday, so keeping up with a chart of that for intraday leadership can’t hurt.

Small and smart. Ease your way back into the week.

Cheers, DELI

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