Trading System Signals on 07/21/2025

The stock indexes seemed prime for a Key Reversal lower last Friday but we only saw a small pullback. Today the market surged higher at the open for about 20 minutes before mostly a sloppy day to follow. It is interesting to see such a strong move for 20 minutes fade into "sloppy" price action the rest of the day. The Dow and Russell rolled over and closed down on the day while the VIX was up. The S&P and Nasdaq remained slightly elevated though. Excess liquidity can prevent some traditional technical patterns such as Key Reversals from performing a complete cycle.

We joined the bulls today with the sharp and early rally. There were nice gains from the gap continuation move that faded into the close. Last Thursday we had some nice gap continuation gains. There are times when we get more of a series of gap continuations or more solid intra-day trends. Since no pattern works all the time and patterns that have been working very frequently such as the choppy, reversal market making patterns, it makes sense for there to be a sequence of strong trend days. Many of the daily charts that look trendy have been formed based on the night time gains instead of the intra-day gains

We are in one of the longest time periods I have seen where there is such a low percentage of continuation or trend moves intra-day.

The hypothetical results are:

Stock Index Portfolio 18 = -$4,360 per E-mini

Two System Portfolio NQ = -1,922.50 per E-mini

As short-term traders we trade for both ebb and flow and anticipate some more extended moves in the market in either direction. Even after today's opening surge, the monthly range is still very narrow. We are also in a more favorable time period of the month for some extended moves.

We continue to track the Wave trading system in the metals as well. I'm not trading these yet but we may do so soon.