Election week, replayed on the levels we published before it traded.
Sunday’s map drew a trap at each pivot, and both showed up. Monday’s ISM spike went through 7,667 and was back under within the hour. The put spread paid at 7,614 that afternoon. Election night flushed ES to 7,490, 48 under our 7,538 test, and it was back over in 2 hours. The call spread finished at full value, about 2.5 times its cost.
Wednesday’s map set the first buy at 7,714 on a touch that holds, and added a cheap SPX 7600/7550 put spread to protect the stock ideas. Thursday the AI trade got liquidated. ES broke 7,714 in the first hour and fell 392 points top to bottom. There was no hold, so there was no fill. The hedge went from 3.65 to 50.
Trap or real break
Monday and Tuesday night both pushed through a line on a headline. Both times the push ran out of volume, and price was back across the line within hours. Thursday’s break never gave the line back, and the first 4 cash bars each traded over 210,000 contracts.
Underneath, 429 of the 500 stocks fell and none made a new 52-week low. That’s one crowded trade being sold through the index, and it’s a different animal from a market-wide washout. ES closed on its 200-day. Friday’s overnight low held 22 points above the line we drew Thursday night, and payrolls came in at 165K against about 60K expected.
What we got wrong
Wednesday’s odds had 3 in 4 similar weeks closing Friday over 7,667. It broke Thursday morning. The entry rule is what kept that call from costing anything.
The week’s notes
This replay is free. The notes behind it:
Last week’s replay: How Wednesday’s Map Kept Us Out of Friday’s Flush.
The map for the week of November 9 goes out Sunday, with the levels, the score and the trades. Subscribe here.
Research only. Not investment advice. Futures and options involve substantial risk of loss.