February 21, 2024 SPX, ES, SPY Trade Plan

Market Recap

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Alright let’s jump into the recap for today. We had a gap down scenario and what is one of my favorite trade strategies in a gap down scenario? A retest of a critical level to confirm rejection and for further downside action.

From our trade plan yesterday we shared these ideas…

1. Below 5000 target 4985

2. If VIX continues going up then a breakdown of 4985 targets 4975-4970

3. If there is a catalyst and volume then a breakdown of 4970 targets 4955

The market opened at 4985 and we saw it quickly pull up towards 4993 and base around 4990 before it sold off. I took this trade targeting 4975 and got exactly that and shared in real time another opportunity to wait and short which would come if 4980 traded…

That breakdown took us all the way to 4955 where we traded and we called for profit taking to occur and leave any runners if you wished…

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Tomorrow during the session we have FOMC minutes, but the big news catalyst will come after hours when NVDA reports ER. If this ticker rallies what it will show us is we haven’t found the top yet, but any weakness in the ER or future guidance will impact SPX and more importantly QQQ and SMH. With that too so will SMCI be impacted…Big one to watch.

I have no skin in the game so I think NVDA will hit on ER, but guide lower. This will effectively cause it to selloff as a lot of future guidance has been priced into the ticker. I think it sees 620-630 zone where it could find some immediate support before it decides what to do next…

2/21 News Catalysts

FOMC Meeting Minutes will be the big news catalyst on the day along with FED speakers premarket and during the trading session

For more information on news events, visit the Economic Calendar

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My Trading Rules

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February’s trading session seasonality…it starts to get sluggish going forward…

SPX’s Seasonal Performance for February starts to show some weakness

It tracks with the larger yearly season calendar during an election year.

Election years are the second-best year of the four-year cycle, & the market has performed better with a sitting president running for reelection. There have been six election year declines greater than 5% since 1896 & the first five months of the year are stronger when the party in power retains the White House. But war can be a major factor.

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