September 24th, 2024

Rally mode remains intact. YM and ES stay firm in their upward grind, while NQ and RTY are navigating a two-way tape to improve their technical status on the charts.

As I’ve mentioned, in diverging markets, I prefer to buy strength or sell weakness. Given the primary bull market, my focus is solely on buying strength, namely YM followed by ES.

As day traders, how does this insight benefit your intraday strategy?

Recognize the divergence and if you’re trading NQ or RTY, anticipate a choppier market and reduce your position size. Trading YM or ES, concentrate on your long setups with standard risk parameters.

For index traders, understanding evolving market conditions is crucial. Adapt to these changes, adjust position sizes accordingly, and avoid fading or overtrading.

You may have a solid strategy, but failing to adjust position sizes when the market shifts or taking excessive trades in a quiet market can be detrimental.

Currently, prioritize primary trend setups in YM and ES. If trading NQ or RTY, reduce size and acknowledge the two-way movement. Keep it light and tight.

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Cheers, DELI