May 2nd, 2024

Embrace the two-way tape. Neither the bears nor the bulls hold the upper hand in the short to medium-term timeframe. The market continues to prove to me that the clear direction is a two-way tape. You can either fight it and pretend that you have an edge of direction or you can embrace the fact that this market is going to be volatile and either direction is in play on any given day.

The bulls have the upper hand on the much higher timeframe, so I will always lean towards the higher timeframe for day trades when the short to medium-term environment supports a two-way tape.

The key for me as a day and swing trader right now is what I say on a regular basis in my note: small and smart. There are some areas that I will look for reactions in the indexes, and for that, I have identified key levels on the daily charts, and currently, we are just back inside these zones, indicating a bullish inclination. If we manage to hold the following levels: ES 5066 and then 5090, NQ 17,550, RTY 1977, and ZN 107’26, I expect the bounce to have legs. If they are given up, then it could be off to the races back to the weekly lows.

Watching the morning action and if the bounce is sustained, I will start to look for long setups. There is no rush to be in this market for me right now. It is a time to show restraint, embrace that this is a two-way tape, and be focused on areas that have been proven in real-time that they are being held. The market will always be there, know yourself, know your edge.

I’ll be live next Monday on Discord at 4pm ET. I will discuss valuable strategies on how to thrive and build resilience as a trader in the challenging market environment of 2024. I will also be taking your questions live on the stream. Register for the event here.

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