Day Set Up: NQ, ES

The long signal for short term position traders comes in today IF the NQ closes decisively above 2143 (above the upper boundary of the pivot channel). This is also favorable as it implies that the stocks were able to move back into the weekly channel established last week with the lows of the channel at 2128, thus negating the continuation of the intermediate term downtrend implied by the weekly time period that was established in late July. This would be positive considering the market is coming off a deep collapse and multi-week downswing. We can see the chart below with today's overlays showing the current activity and objectives with target blue and brown horizontal lines indicating the important weekly and monthly boundaries.

How do we go about entering long into this trade? I can either choose to wait for today's close and go long If conditions above are met. Or, I can use either an intraday 'buy' signal or 'failed' sell signal on the 15min chart to establish my position intraday with stop. For NQ, the buy signal comes in if enough time is spent above 2190 and the failed sell signal comes in either at the 2152 level (top of the 1 day pivot) or 2136 (bottom of the 1 day pivot).

For ES, the logic is the same. I'm showing the hourly chart below, indicating a daily close above the rolling pivot at 1158 would be supportive, and more importantly, a close above the weekly channel level of 1163, as per the logic above.

Traders still have to be aware of the macro picture down trend in place and increased risk of taking the long trade if it presents. More conservative traders can wait to trade in line with the down trends once the rally stalls out and falls back below the 3 day rolling pivot range which will likely re-ignite downside pressure, as nothing fundamentally has changed economically. Through my 5 year back test of this strategy I have discovered different scenarios that can evolve when 'fresh ' counter trend signals are given; Monday could present as a day that violates this thought process of going long. Such is the case that long traders get caught in the whipsaws of volatility