Where we going Boss?

The Morning Briefing is my attempt at teaching people how to prepare for the trading day. I am not trying to give you todays answers - but to TEACH YOU how to get the answers for your-self. This post is going to cover the steps we take in the morning briefing; your personal approach may vary from this and that is great! Make it unique to your style of trading and your needs.

The purpose of developing a routine in the morning is to keep us on track (it's very easy now days to get side-tracked by any random pop-up) and to help us identify if today is even a day we are interested in trading.

Not All Days are Tradable Days

I know - I know ... that is NOT a popular statement. New traders who are learning the steps to trading do NOT want to hear that... but the market has 6 types of days & these 6 days types repeat over and over again.

If you are a trend trader - you won't like trading a range day. If you are a range trader you won't like trading a sideways day (yes, these two are different).

Any trading day is a "tradable day" - but just because we "can" trade it does not mean we "should" trade it. Is today the sort of day that works well for your strategy?

Big Picture

One of the first things we want to look at - is the "big picture." Global ... lol ... is that big enough for you? When we are sleeping the world does not stop; there is a cycle to the markets that starts in Asia and travels through Europe before coming into the USA markets.

Global Events

What happened while we were asleep? How did the Asian markets do - what is Europe doing right now as the USA traders are waking up and then what is on the schedule today.

Last Night

Since events are scheduled - we can look at the over-night schedule today and be ready for over-night moves. Then - (when we wake up tomorrow) we can check to see how those events moved the markets.

Economic Events

Economic Events are what we call the "known unknown" - because we know there is an event but we do not know what the event will do to the trading day. It's a possible surprise - while at the same time it's something that we can prepare for.

Surprise

The markets do NOT like surprises; things that can move markets the most come from things that hit us blindly. Some examples of this blind-side gut punch include a ship getting stuck in the Suez Canal (the Ever Given - MARCH 2021), $BA Boeing air planes falling out of the sky and killing entire family's of people (2018), Baltimore's Francis Scott Key Bridge collapse (March 2024) or more recently a global systems Y2K"ish "blue screen of death" windows crash after $CRWD sent out a janky systems update (JULY 2024).

Taking a look at what happened over-night is really just hearing any "headline news" which sounds like it shut down something major.

A rail-way crash, Union Strike, Bridge collapse, a container ship getting sunk ... what-ever happened over night that can cause supply chain issues, disruption of services, or the closing of critical infrastructure...

Headlines First - Scheduled Econ Second

Headline News

Now days everything is "breaking news" and it's easy to get caught up in the hype - but try to keep a focus on what was moving the markets while you were alseep; if the markets are sideways then the event wasn't "too bad" - move along. If the markets are up / down over 1% in the premarket then find out why!

Global Analysis

Once you have a grasp on any known events that may have popped up over - night we want to focus on the "known unknown" events that were scheduled over-night. Did Asia report GPD, Employment or Rate decisions? What about Europe? Did they report anything yet? Are they going to report anything soon?

Europe is open for part of the USA trading day - so some of their events come in while we are sleeping but some come in while we are reporting our own morning events and as we come into the RTH (Regular Trading Hours - 9:30 open to 4PM Close).

Chech to make sure Europe does not have anything scheduled for the day - then begin looking at the USA markets (and a little bit of the Canada markets).

News Events or Scheduled News

Does the USA / Canada have scheduled events for today? There are a number of events that happen EVERY DAY - but not all of these events get listed.

Check multiple sources for scheduled events. Different sites offer a different list - some only show the USA, some only show "big events" and skip the little ones, some try to show everything (cough) - but what they consider "everything" is actually "everything they think is worth mentioning..." and it's NOT everything.

There is NO place that lists every event for the day simply because there are 50 to 100 events each day and so many are rarely a cause for moving markets.

Trading Hours Website

What markets are closed for a Holiday? If Asia did not open today because of a major holiday - then we need to know this. If Europe is closed today for a national Holiday - we need to know this. Heck - if we are going to close early today - or even close early this week - we need to know this!

There is a company called TRADINGHOURS.COM which shows nations around the world and list's that nations holidays, that nations open and close hours, and shows if that nation is currently open or closed.

Earnings

Now that you have done a global analysis, looked for headline news from around the world, checked to see what global markets were open or closed, checked the reported economic events and scheduled economic events ... it's time to look at earnings for today.

Are there any companies that are reporting this day of note? AM or PM? In the AM - will these companies move the markets in a big way? Have they moved the markets before in a big way?

$NVDA

The companies that "could" move markets changes over time - right now a company that WILL move markets on earnings is $NVDA. Worse than moving markets on the day it reports - $NVDA is such a threat to the markets we'll likely see the earnings week of $NVDA force the markets into a tight range until it reports.

$WMT

We do not have some perfect list of companies that can move the markets - but any of the MAG7 group "could" move the markets; then there is things like $WMT - this thing can move markets due to it's one of the largest reatilers, one of the largest companies (by revenue) with over 2 million employee globally.

So - while it's important to stay focused on who is reporting earnings - it's not quite so simple to determine which of those earnings names are "big movers"

You can keep up on the list of MAG-7 names here. They rotate so it's good to check from time to time. Then any company that has a history of moving the broader markets - either because their forward outlook is heavily weighted by market participants or because the numbers they report reflect upon the consumer.

Banks

Popular CEO's at major banks (like Jamie Dimon @ JPM Bank, Jane Fraser @ Citigroup, David Solomon @ GS Bank) can also move markets at earnings and at conferences. We always want to look for headlines of these CEO's meeting at a conference or hosting an event.

Fund Managers

Popular fund managers can also move the markets - people like Warren Buffet and Cathy Woods for example have been known to move markets on their forward outlook on the USA economy. Activest Investors such as Carl Icahn, Bill Ackman and Ryan Cohen can also cause markets to move.

We are not trying to follow the recommendations of these influencers ... we are only trying to get ahead of them. If they are scheduled to speak somewhere - if they are doing a conference call - if they are in the schedule as a group - we want to know when they speak, what they are speaking about, and consider if their comments are likely to move markets.

Events

There are events happening all the time - big ones like Amazon Prime Day or Cyber Monday but there are smaller events too - like Bit Coin Conferences - bank conferences - "investor day events" and so many more.

It's easy to over-look these events as day traders but they can move markets! If we see a short covering rally kick off while we also have Tech & Semi's & finance also ripping higher, it's likely that we will breakout in the indexes and run all day.

If you have not caught on yet - we want to look at what could move the markets today - and plan for the "known unknown" events long before we actually get to the charts.

It takes time and patience to get familiar with the popular events that cycle through our markets - but it's this background that makes us stand apart from those traders who get blind-sided and are left asking "What the heck just hit the market?"

Economic Events

There are popular economic events that we deal with each month which has to be monitored. I'll upload a document (here) that has a list of the events and a list of the financial website that I use.

I always tell traders to make a chart on the S&P and mark out the last 10 times an event has happened to see what the markets have done previously. For example - if we have the USA- PMI next week I would want to mark out the last 10 PMI's on the S&P chart and examine what the markets have done on previous reports.

Save that chart - so you don't have to draw it all out again next time. Some brokers let you do this - some do not. If you can not save your drawings - take a screenshot and save that instead.

If you have made it this far - congrats!! We have covered a LOT of material already and we are not even to the half way point yet. Take a break to get a drink, stretch, what-ever & then keep grinding. So far - we have covered "Top Down Global Markets" and "Events" and that is a LOT to chew on. "Routine" is important to all of this. Developing a routine can eliminate errors and speed up the morning process.

Start small - doing one or two things each day. Once you are comfortable with those two - add two more. Continue this process until you have added all the morning routines to your schedule. Keep in mind that I typically trade for today first and I deal with swings later in the day so my routine is set up to capitalize on this approach. If you are not day trading then your focus may not touch on each of these topics or may put more weight into one thing more than I do.

That is 100% ok. My approach here is not exactly how every else should do it. It's my approach and it's designed for my trading needs. But - my goal is to show you what I do - and offer you suggestions on how you could do it. Feel free to adjust what you focus on and make the morning routine your own unique thing.

PreMarket Movers (4am)

I do my morning routine at 4am and I do it again later (live) at 7:30am. At 4am we really don't have much insight into the equity markets that are gapped up - but we have the futures index, currency and Country ETF's to look at.

If there are markets that are moving - then a 0.50% move is a good starting point for considering how much things have moved. What markets are up "at least" a 1/2 percent? Did that move give them a breakout of yesterdays price?

Can we trace the move back to a specific event (global news, over-night economic data from a global market) or is the move more organic (meaning it has come from a grind in price due to carry-over bias of the previous day's trading)?

We are all trading the same markets - so it's best to set your charts to the time zone that fits the market. I recommend "Eastern Time" since it's the New York Stock Exchange. Yes, there is the CME in Chicago but don't over-think this. Chicago is not the financial hub of the world.

If the market is still inside yesterdays range then we can set alerts on the range edges and continue our work; but if the markets have already broke out of yesterdays range then we want to establish continuation targets and levels.

We can get outside of yesterdays range but not move more than 0.50% - so it's important to consider how far we have moved no matter if there was a breakout or not.

Was there a large move over-night that was later given back? This move can give us a "globex range" that needs to be marked as well. "GLOBEX" is a phrase meaning "global extended hours" or overnight trading. It's from 6PM to 9:30am.

Futures and Currency markets have a "globex" market; equities have "after hours" and "Pre-market hours" but both have RTH - regular trading hours).

Some USA markets open early - like treasuries and commodities. Some USA markets close early - too. Know your timeframes for these various markets and understand that time matters!

Pre Market Movers 7:30am

During the morning briefing - it's still pretty early (7:30 to 8:30am) and it would be better if we were to look at things closer to 9am but I have to get the briefing out so we do it early. Since it's still early - I look at stocks and sector ETF's that are gapped at least 0.50% but if you are doing your own routine before the open - then 9am is a good time to do it.

If you do a market checkup at 9am you will want to adjust the number to a 1.00% gap. We are looking for outsized moves as a "tell" for market sentiment. If "EVERYTHING" is moved more than 1% in the premarket then it's very broadly bearish / bullish out there. If only "some things" are up 1% - what are those things?

Yields? Treasuries? Bonds? Commodities? Pot Stocks? Small Caps? Mag 7 names? Semi's? We have "Defensive" sectors and "offensive" sectors - and we have midline sectors that can go both ways (offensive or defensive). (Consider it "Growth vs Value if that helps).

Sector movers are a signal about where the money is going this morning. If there is a lot of money flowing into "risk assets" then it's likely going to be a bullish day. If there is a lot of money flowing out of risk assets then it's likely to be a bearish day.

Breadth

There is a market concept that suggests if the S&P-500 is bullish - so is the broader market. Or - if the S&P-500 is sideways then so is the broader market. In recent years - because of the MAG7 - it is no longer as true as it used to be. Now - if the MAG7 are bullish then it's likely that the S&P is too (the index, not the 500 names in it). This makes things a little more tricky when "some things are gapped" but not everything is gapped.

Pay particular attention to the MAG7 names - yes. But also - why they are up or down. 80% of the market used to get moved by these mag7 names but more and more often we are seeing a disconnect from them and the broader markets. The Index still gets pushed around by them how-ever - so we want to know what they are doing.

And - yes - some days it's a wild -goose chase ... some mag7 names will be up - some will be down - and some index will be up (like maybe the IWM or DIA) while others will be down (like the S&P or the NASDAQ) and with all that divergence and mis-aligned market dynamics it's a mess out there. It's not always a clean / clear example of bullish / bearish bias and sentiment. The NUMBER ONE THING - is that when there is agreement across the board - we want to know about it! And when it's a wild mess with everything doing it's own thing - well, we want to know that too.

The Charts

At this point - we have a good idea of what happened while we were asleep and moved markets - we know what markets are gapped and (hopefully) we understand why they moved.

We have a list of the scheduled events for the day and alerts set at the highs / lows of the previous day (or week).

This is the point where we want to consider - what is likely to happen today? Are we waiting for some large event that is scheduled to take palce later today - are we seeing the movement from a large event that already took place? Will it continue?

If that move is happening now or if that move is anticipated to come today - we want to consider the chart and ask some important quesstions.

Where Did we Come From - Where are we Going?

Sounds funny - right? But - higher timeframe charts really do matter and if we want to know what we will hit - then we need to look at the charts and identify the things in our path.

I am a pivot point trader - so I pay particular attention to pivot points. That may sound easy - but a pivot can be anything! Any place where price may turn and go the other way (the very definition of pivoting) - is a possible pivot point.

Any "known" or popular pivots are also important and must be evaluated too. Some "known" pivots are OHLC, Globex HL, Weekly OHLC, and "floor pivots." These are things we could hit!

We can add to that the Monthly OHLC, Weekly Floor Pivots, Volume Profile pivots (the VAH, VAL, POC) and even things like moving averages and channel indicators can be pivots (channel indicators like Bollinger Bands, Keltner Channels, VWAP Bands, and Anchored VWAP).

We don't want to keep all those lines on the chart - it's way too much noise and it's just messy!! But - we DO want to know where these levels are - and which ones are important. (hint - they all are possibly important).

When we mark out a pivot - we want to consider why it's possibly important or not. Is the pivot marking new highs, is it marking an area we left violently (or quickly), is it marking an area we have visited many times over the last day or so ... are we likely to come across a large group of traders there (like institutions) - what timeframe does it exist on- was it a pivot made on an old contract?

Options Data

I know - some of you are not trading options - and don’t know anything about trading options… but you can still use things like Call & Put wall and Zero Gamma, Volatility Triggers, and GEX levels. While this is not the page to explain what all these levels mean - they are important levels that you’ll want to see on the chart through the trading day.

I use my own personal levels as well (see the post “Measuring Things” & “Measuring Things II” for more on this) but - once my intraday / intra-globex ranges are exceeded we have the days options structure and it’s ranges. Think of it like this: a markets daily range is a known thing - we know where price “could go” - / “should stay” on a daily basis and the turning points (range) is often held in place by existing liquidity… so knowing where that liquidity is at is important.

If we exceed that and break through that liquidity - then we know the market is doing something unusual - it has cut through the liquidity holding it to the mean range and then we all have to ask - where could price go next? Where is other pockets of liquidity that could stop or pause price next?

There are various options data companies out there; each with unique tools that I really like. One that stands out - for it’s CTA data and TradingView integration is MenthorQ. You can check out there website here.

They have some great blog posts too - to explain all these levels and tools. If you are day trading - they have a robust discord community full of active traders. I do not have an affiliate link - sorry.

Write it Out

We need to develop a Thesis. When developing a thesis for the day - we want to examine things from the highest timeframe to the lowest timeframe. We are looking for answers at this point to write up our thesis - not developing a trading plan.

Thesis means: a statement or theory that is put forward as a premise to be maintained or proved. The markets will prove us right - or not (the alternate thesis).

Go to the monthly chart and write at least one sentence about the monthly chart. (More is not always better). Identify at least one thing of note - like how far from the monthly high/low we are - or where the monthly 10MA is at.

Write at least one sentence about that monthly chart and identify where the next highest / lowest pivot is at. Consider how far away it is from out current price. Are we moving towards that level - or away from that level?

Could we hit that level today? Is there a -1/2 back we could hit? A Moving Average we could hit? Have we hit one of these and bounced off of it?

The Thesis

Thesis means: a statement or theory that is put forward as a premise to be maintained or proved. The markets will prove us right - or not (the alternate thesis).

After we look at the monthly chart - we want to swap to the weekly chart. Consider all the same things; OHLC, moving averages, measured moves, channels. Ask the same questions: are we going to hit something if we keep moving in this direction? Did we hit something that sent us in this direction?

Write at least one sentence about that weekly chart and identify where the next highest / lowest pivot is at. Consider how far away it is from out current price. Are we moving towards that level - or away from that level?

Could we hit that level today? Is there a -1/2 back we could hit? A Moving Average we could hit? Have we hit one of these and bounced off of it?

Take notes.

When taking these notes - you can use a text document on the phone or tablet - or even on the PC but I like using a piece of paper / pen. Does not matter - big picture - just need the notes!

When you are taking these notes - consider the day to day narrative. Carry that forward from yesterday. For example - if you mark a level we could hit and then we hit it today - tomorrow in your notes make reference to it. Like "we hit the July monthly high yesterday and rejected hard from that level."

This is called "carry the narrative" and helps us maintain the story. Chart reading is a lot like reading a book that is not finished. Each day offers another chapter in the book - and that chapter is based on what has happened previously in the story.

This is a skill set that a lot of experienced traders have - they either do it mentally or they do it in writing - but they have that day to day analysis and consider todays activity based on some of what happened yesterday. You really want to develop an instinct on the narrative.

I wrote more about “Top Down Charting” in another post; check it out.

Trade Plan

By now - you have a top-down approach on the global markets and on the trading day - with a good idea of what is moving in the globex and your notes have all of that along with key levels and pivots.

Now - you want to start the plan. Are we expecting a range day - while the market waits on data later this week - or are we expecting a trend day? Do we need to break out of a range or have we already broke out? If we continue to move in this direction - what will we hit? If we are range bound right now - what is the market waiting on - (do we know?) and when will that wait be over?

The trading plan is our way of setting goal posts for the market. At each goal - if price gets there - then what? If price continues to drive further - what is next?

What is important during all of that - is the time of day. The plan can be complex or simple - that is all up to you. It can also be used to define if today is even tradable - simply by pointing out that we want a trend and it's a range so far - or that we want to see the breakout and we are waiting for that breakout.