This week, the market exhibited a blend of high-yield trading opportunities and sideways movements on broader timeframes. Volatility divergences remained the most effective trading signals, prompting traders to adapt by focusing on short-term setups during slower sessions.

Key Highlights

• Volatility Divergence Success: Late-session volatility divergences led to significant returns, notably a 1,200% gain on Russell 2000 calls.

• Importance of Short-Term Scalping: With hourly and daily charts lacking clear direction, the most profitable trades emerged from 3-minute and 5-minute charts.

• Russell 2000 Outperformance: This index provided superior trading setups and consistent opportunities compared to others.

Market Trends

Volatility: Double-top and double-bottom divergences continued to be reliable signals, especially during the final trading hours.

Performance: The Russell 2000 led the market, offering stronger trades, while SPY and QQQ presented mixed signals.

Best Trades of the Week

• Russell 2000 Calls: Purchased at $0.15, these calls surged to $1.00 (~6x return), settling at $0.40 amid market volatility.

• SPY Calls: Afternoon volatility divergences confirmed 8x returns on quick scalping setups.

• Short-Term Scalps: Consistent profits were achieved using 3-minute and 5-minute charts, while longer timeframes remained flat.

Trading Philosophy

• Volatility Signals Drive Success: The most profitable trades occurred when identifying volatility divergences, particularly during key trading hours.

• Adapt to Market Conditions: In choppy or unclear markets, traders found success by focusing on short-term timeframes and avoiding forced trades.

• Timing is Critical: Major trade opportunities emerged in the first and last hours of trading, emphasizing the importance of precise execution.

Looking Ahead

Traders should continue focusing on Russell 2000 for its better follow-through on volatility signals. Anticipate clearer patterns to emerge, but remain patient until high-confidence setups present themselves.

P.S. Stay patient, trust the signals, and execute with confidence!