Navigator™ Signals for Day Traders Pre-Market Outlook – 7/1/2021 by AF Thornton Jul 1, 2021 0 Comment Yesterday - 6/30/2021 Yesterdays RTH Session S&P 500 Index Futures - 5-minute Candles Welcome to July. We had a double bottom test of the previous day’s RTH low on the open in yesterday’s regular session, but the ensuing rally reversed down from a wedge top. Then, after a three-hour weak bear channel, bulls rallied again in the afternoon drive from an expanding triangle and a higher low into the close.The market ran into resistance just above the Globex and yesterday’s early day high near the close, but still managed to achieve another marginal all-time high. Notably, the June candle closed near its high. As such, July might gap up on the monthly chart.We stayed above yesterday’s low, leaving us now nine full days in a bull micro-channel, keying off the 5-day EMA. We should get a pullback soon, as today is a Fibonacci turn date, but the bulls will buy the first one to three-day pullback. Also, we have the usual long bias on the first few trading days of the month. I am looking for a liquidation break to take us back to test the 4250 breakout, and we would have to consider a swing entry point there. Yesterdays RTH Session S&P 500 Index Futures - 5-minute Candles I took three trades yesterday, as illustrated on the chart above. The first netted six points, the second netted fractionally better than break-even, and the third netted six points. Generally, it is not advisable to take the middle trade over lunch and yesterday was no exception (unless you like chop).On these low volatility days, consider using more contracts, tighter stops, and going for fewer points. Today's Plan Deja Vu. Another new marginal all-time high in the overnight session and a very nuanced overnight low that came down very close to halfback and the POC. Short-term momentum traders remain in control, and the potential for a liquidation break gets stronger every day.The Key Levels list (below) continues to grow as we keep listing all the recent VPOC’s and the small gap. We’ll keep that going until the end of this week. Next week, the market is closed on Monday.We have to continue to do what works until it doesn’t. You have all the Key Levels right in front of you to tell you when it stops working.You will know a liquidation break by an increase in tempo and a relatively swift taking of some of the Key Levels. The slower tempo in the context of what we have been experiencing is a continuation of the current dynamic. Assume pullbacks are buyable – especially at the 5-day EMA.It has now been eight sessions since we’ve had any lower value, not to mention that we’ve been one-time framing higher for those sessions as well. That should tell you that only a move below the previous day’s regular session low has potential for change. Note the weakness in the NASDAQ 100 the past few days compared to the S&P 500. Carry that forward as a potential warning for a large, liquidation break. Yesterdays RTH Session S&P 500 Index Futures - 30-minute Candles The Key Levels on your chart should be 4305.75 (last night’s ONH / ATH), 4277.00 (Yesterday’s RTH High), 4286.00 (ONL / Halfback / POC), 4277.00 (Yesterday’s RTH Low / Double RTH Bottom from Previous Day / Weak Low) 4270.20 (6/28 VPOC / Weak O/N Low) 4260.75 (Weak Low) 4256.25 (6/24 Prominent VPOC), 4251.25 (Gap Top) 4246.25 Gap Bottom 4239.00 (6/23/ Prominent VPOC). Always be cognizant of your roundies (100-handle block/point scale – 4100, 4200, 4300, etc.) and half-roundies (50-handle block/point scale – 4150, 4250, 4350, etc.). As an example, we are flirting with 4300 at the moment. A daily close above 4312 almost ensures that we will hold 4300 and move to 4333, and a daily close above 4233 almost ensures we will go up to 4350. A close below 4288 almost ensures a test back to 4250.When you clear your chart and step back, you will observe that the S&P 500 moves and hesitates around the scale in 50 point increments – 4200, 4250, 4300, 4350, etc. That is what the battle is all about – capturing gains in 50-point progressions. Step back on a daily chart with nothing but candles in front of you, and you will observe this for yourself.Keep the butterfly harmonic topping pattern now almost complete on the QQQ daily chart. That should be carried forward in your narrative relating to a potential liquidation break. The NASDAQ 100 was leading the troops, but its relative strength has waned for two days now.This will be my final commentary until Tuesday, other than the macro View from the Top discussion, which I will publish Monday.A.F. Thornton
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AF Thornton Website: https://tradingarchimedes.com A.F. "Arthur" Thornton is an expert in logic, risk/reward quantification, market fractals, pattern recognition and asset class behavioral analysis with 34 years devoted to developing algorithmic and quantitative trading systems. In addition to trading his own capital, Mr. Thornton designs custom algorithmic and quantitative trading systems for a small and exclusive group of exceptionally qualified traders.