Daily Plan 4/13/2023
Hey guys -
Make sure to read the whole post for important educational content.
So the primary expectation based on the updated OrderFlow this AM was to see sellers retain control of 4180 and the buyers able to defend 4110.
These two were good levels with most of the day’s action between these 2 levels. We first sold down from 4180 which was almost the exact high of the day into 4110s and then rally from here back to 4150s, selling down from there again into 4110s to close the day at 4120.
In total, within the cash session, about 150 points of the 2-way auction on a very healthy volume of about 2 million lots.
This underscores what I have been saying - you do not need bias in intraday trading as long as you have good levels. Why, let us assume you went in with a bullish bias at the open, on the backs of that soft CPI, you would have been crushed.
This is why bias does not matter at all within intraday time frames in my view. Levels and execution are what matter the most! The session also highlights the fact there is nothing wrong with OrderFlow as a methodology. When the market gets volatile, the number of opportunities (Time-Price-Opportunity or simply the TPO) also gets higher and higher, allowing folks more number of set-ups. More number of setups automatically can mean greater opportunities. If you did not give up and stuck around, you can potentially benefit once the tide turns.
Speaking of that CPI, the soft number was called by me on Saturday’s weekly plan! I had predicted this softer CPI on the backs of weak March gas prices. Now the gas prices are rearing their monster head again. Gas is now quite expensive, even in boondocks I am seeing 4-dollar gas. Home prices are again spiking on top of food prices. This may keep CPI high for next month. Something to consider when reading tea leaves from May FOMC.
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Today, I also decided on an ongoing basis, I will be sharing some options’ names with exact strikes, premiums, and expiry dates with subscribers. For example, I shared KMX put today at around 75 cents which traded at one point as high as 2 dollars. This may still have some juice left if the general market starts slipping BTW.
I have always maintained I do not want to get into exact execution details but this is as close it gets me to execution as I am willing to. For now, there is no change in pricing. I will see how it goes, and if enough people like it, I will have to set pricing competitive to similar services which can be 300 a month compared to about 36 for this one. No one who is already subbed will be impacted by this change (as long as they do not resub).
To get these alerts, you must download the app, and turn on notifications from me. In Substack, there is 0 noise, unlike on Twitter where I am sometimes distracted. Strictly business.
Before diving into levels for tomorrow, I want to do a quick recap of where we are in the longer-term structure.
I present Chart A of NQ Daily auctions below.
Off the bat, you can notice two things about this chart.
A) NQ top range is relatively small or flat. This could indicate lower participation by folks.
B) NQ has made lower highs.
Now this is about 12 days, or 3 weeks of the auction and the auction really has not gone anywhere while there is so much noise online about a brand new bull market.
Technically, IMO (in my opinion), this is not a good-looking chart. If you break out of this, there is not a lot of orderflow here to provide a good floor. You need a good floor underneath you if you are going to break away from here.
Similar, things can be said about Emini S&P500 but it is rather more dramatic here in NQ.
My key levels for tomorrow
My key level for tomorrow will be 4140.75.
Scenario 1: If we open and remain bid above 4140.75, we could retest 4160.
Scenario 2: Bears need to open and have the IB close below 4140.75 to test 4100.
The edge case for me remains the 4100 and 4170 zone which is a weekly area as well. An update may be sent in the chat room if we are able to take out the edge cases, dependent on what OrderFlow I see then.
At the time of this post, we last traded 4115.
These daily plans tend to be intraday focussed. For weekly and swing time frame context read the Weekly plan shared below.
I also want to reiterate two very important points. As an intraday trader, I can not ignore what Tic TOP indicator is going and what the market internals are doing. Let’s say we open above a key level but we begin to see Tic Top make new lower lows and lower highs, I do not want to be bullish in that context. Vice versa, I do not want to be bearish anymore IF Tic TOP indicator is making higher highs and higher lows. Tic TOP and market internal posts are a must-read!
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MARKET INTERNALS
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~ TIC TOP
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