February 23rd, 2024

Rally’s not over. After a massive rally like we’ve seen in the NQ and ES over the past 24 hours, it’s easy for a day trader to look to fade it because it’s ‘overbought’. That’s the easy trade right now, but I think the wrong one. I mentioned yesterday how I love the low in NQ and I think they are headed to 18,450 in the coming sessions, and I believe that to still be the case.

Nothing about the market environment right now tells me to fade it besides the ‘overbought’ talk. Overbought is never a reason to short the market unless the market fails to go higher on more positive news. Then, the market is telling you it’s tapped out. For now, I believe the NQ and ES are buy the dip markets for day traders.

Keys to watch today.
NQ 18,000-17,985 has yesterday’s RTH VWAP, and MentorQ 0DTE GEX level and the Gamma Wall. As long as that area holds, the bulls have the ball to run with. 18,100 is a GEX area that could be a place for the market to pause, but above there we’re likely headed to the 18,200 area.

ES support this morning is 5,083-5,070. That is yesterday’s RTH VWAP and MentorQ 0DTE GEX levels. As long as those areas hold, I see us trading up to 5,124 and then 5,152.

I like Event Contracts for days like today because I think that the ES and NQ have a chance to rally pretty good again today, but it may be late in the day. The morning may be a bit choppy. I bought some 5125 YES in ES this morning for $20. Risk is $400 to make $1600. If they get to 4125, they will most likely be trading $50 and depending on the action, I may take some of them off just to lock in some profit and take my risk off the table. Remember you can trade out of them and don’t have to hold them until the close.

RTY remains a two-way tape, no trade for me right now.

Today could easily be a choppy session this morning, so I advise caution with being aggressive with any positions. Take what the market gives you and call it a week. Wishing you all a wonderful weekend!

Cheers, DELI