S&P 500 Daily Trade Plan: Conflicting Signals & The 7414 Make-or-Break Pivot
A detailed ES & VIX plan for May 20th, breaking down the 7414.00 major above/below pivot, the 7419-7424 make-or-break reaction zone, and the VIX 18.43 daily inflection point.
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Morning everyone. Today is Wednesday, May 20th, and yesterday was another unbelievable day in the trade plan where we called three of the absolute best trades. The first paid dividends right off the rip — the call to sweep the previous day’s low into the 7300s area and pop back into the 7400.00 location, paying 25 points in the first fifteen minutes of the day. Easy money, in and out. Then we called the sweep below the 7360.00 leg-in low, which ultimately reclaimed 7366.00 and powered all the way back to the 7414.00 significant Daily for a massive 50-point squeeze — only to turn around and hit our 7414.00 Daily, the level in the trade plan, to come cascading down for another 50 points. Just another incredible display of trade plan amazingness. Congratulations to all those who took advantage of these three amazing calls that played out consecutively, back to back. Yesterday was a perfect display of how a professional-grade trade plan and patience can change everything — by waiting for three high probability trades and all three paying massive dividends.
As we come into the morning, the ES has drifted sideways only to go down and retest the lows from yesterday and pop back up, making it all the way back to our 7414.00 level or very close to it. We are up 25 points at the time of this writing and sitting directly at our massive area of resistance — with a very interesting predicament to the downside as well.
A Note on Today’s Market:
News: No Red Tag news events this morning. We only have FOMC Meeting Minutes at 2:00 PM — a Red Tag event we need to be aware of. However, we already know what took place at FOMC, so the minutes are simply a recap of information we already know. There is nothing new on the table as of now, so this could be fairly muted, but be aware of the time to watch for reaction.
Volume: Relative Volume is -25% this morning, which could potentially mute our range. Be aware of this low relative volume grind-mode possibility — with no Red Tag news until later this afternoon, it may be a very slow morning. We need to be patient and look to trade our edges.
Range: Expected range of 81 points. We have already moved 56 points in the overnight session, leaving us approximately 25 points above or below the overnight high or low. Given we are sitting directly in the middle of yesterday’s range at the top of the value area, statistics tell us we will more than likely break out of this range — we could pop yesterday’s high or sweep yesterday’s low.
Gamma: We have continued to lose support on the four-hour timeframe. Last night we closed below our 7366.25 four-hour leg to the all-time high, once again making us lose support to the all-time high. This was a huge loss and sets the stage this morning with a downside lean.
Trend: Conflicting signals. ES has now lost on the Daily, four-hour, and one-hour timeframes — a big sign of weakness and potential downside momentum. However, SPX partially maintains its bullish structure, having lost the four-hour and daily time frame yesterday sub-leg but not the full leg to the all-time high. This disparity must be accounted for, and it could all change fast.
🧠 Current Market Context
The Conflicting Signals & The 7414 Line in the Sand
We come into the morning in a very interesting predicament. We have lost on ES on the Daily, four-hour, and one-hour timeframes, losing again in the overnight session. However, that massive sweep underneath the major low can potentially be a catalyst to squeeze the bears and push us much higher. ES gives us a very interesting picture — we actually lost four-hour support again last night, closing the four-hour below 7366.25, meaning we have lost support on the one-hour and four-hour timeframes, and yesterday we lost on the Daily. This is a very big sign of weakness and potential downside momentum. However, the fact that SPX is still holding support gives us a discrepancy we must account for.
