NQ ATH's Short NOW? Here's How!
Heavy Rebids at 20332
Lets talk about the heavy reloading bidder today at 20332 on NQ today!
Just prior to putting in a fresh new ATH on NQ today there was an active buyer who kept reloading at the 20332 to about 20328 before running nearly a whopping 100pts + to close the day at ~20435.
This buyer was spotted initially by one of the live stream viewers on youtube using the DOM, Shout out Diego!
As we trade into ATH’s it gets really interesting to try and find structural areas to identify for short trade ideas. This is why in my opinion it is crucial to use the Depth of Market (DOM) to spot seller strength before attempting to identify sell side opportunities in the market while its ripping into all time highs.
The easiest form of short trades in an uptrend is to simply short “weakness.”
Obviously Rick why would I short strength?
Well.. That’s exactly what I did on 7/3/2024 on my live stream and was reminded of this very concept upon a journaling session after end of the trading session.
So with that in mind, the concepts of my trade philosophy in terms of short trades will derive simply from price acceptance below structurally important levels of interest which is what I will be discussing in todays blog post before we dive into the plan for 7/5/2024!
The idea when waiting for “price acceptance” is generally a trend continuation trade idea and the confirmations are going to be as follows below:
A visual example will be provided as well just below!
Price moves meaningfully in any direction up / down
The asset breaks above / below a key strong level defended previously a few times
Once the meaningful move has happened price will attempt to reclaim the broken level and “fails.” This generates interest!
Ideally Price will come back to its previous bounce area and attempt another retracement into the reclaim zone, sometimes it will even break the previous high of the previous reclaim attempt, but ultimately fail. This is the trigger
From there price will usually losses all momentum and full move in the direction of the meaningful move direction and continue its trend!
The Visual Example was provided from a previous pre market plan given for the ES using the 5526 level as the zone of interest in this post! The walkthrough of price action was provided via the discord server when the trade idea triggered with entries and take profit zones during this overnight session trade took place!
ES moved meaningfully in the down direction.
ES Broke a key level outline by Pre Market Plan on ES 5526
3.ES attempted to “reclaim the broken level 2x at 5526
ES came back to its previous bounce area and attempt another retracement into the reclaim zone 5526, as mentioned price overshot the previous high to 5527, but ultimately failed. This is the trigger
ES broke down and continued the move in favor the meaningful move! Profit was taken on levels annotated on plan via resting limit orders!
This is the Generic illustration of price acceptance trade ie Trend Continuation trade
What Levels to Watch NQ 7/5/2024
Bull Thesis:
We have NFP on 7/5/2024 Pre Market, the last few sets of data has not really moved us in any direction given all has been “inline” with that being said it is possible we have no meaningful move and trade “sideways” or slightly higher. My trading edge will not be present in this time of environment as I primary trade reversals in favor of trend or flip of trend, In this scenario I have no plan and will refrain from trade until the next week.
Below are 2 scenarios :
Scenario 1:
Price would come into the 7/3/2024 overnight low of about ~20205-20170 and reclaim the overnight low of 20230. This would set it up for a reversal in favor of trend and TPs would be as follows: 20280 / 20300 / 20325-32 / runners
Illustration Below of Scenario!
Scenario 2:
NQ would go as low as the early June range low of about 20170 over shoot break the level test about 20120 and come back in and reclaim the 20170 this could ignite a bigger squeeze on a reversal and the take profit zones would be below:
TPs : 20230 Backtest / 20280-70 / 20325-30 / runners
Bear Thesis:
Same Plan as prior if below 20120-20080 Zone
It has been very difficult to short the NQ lately so I have refrain form shorting the lows on NQ only plan for shorts would be at higher prices with anything above 20120 - 170 in play . Ideally a squeeze past the 150-170 zone with a quick retracement below 120-130 find acceptance and drop below down to 20k to sub mid 900s. The action would look a lot like last Fridays Price action an illustration will be provided below as reference.
This type of price action shows relative weakness and buyer inability to reclaim higher prices for a trend continuation move lower.