All Ado About Nothing
Daily Plan 10.5.23
Hey there-
Scenario 1 from last night was a tremendous scenario as we barely did any business below it either in the night or in the day time , only to see us rapidly rise and trade into 4300 area.
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As if this was not enough, TSLA, GOOG and NVDA did well today.
In fact TSLA was up like 6%, this despite the bad deliveries and bad margin news for this company. I shared this with my folks here below. Turned out to be a good call missing 270 by a handful of points.
Then there is this beauty from yesterday below:
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Levels for tomorrow
The main issue for any one who is a bearish here is that they have to contend with the auctions in names like TSLA, AAPL, NVDA , GOOG etc …
If I am a bear, I do not like the action in these Tic TOP type names. I alluded to this a couple of days ago and that has not changed. At least NOT today.
Chart A above: SPY Weekly auctions. Lots of volume coming in, but look at the results.
I personally think that the strength in market is due to the mega caps (tech). I know it is a little counterintuitive but when you look at the bonds, this market is not showing any sign of confidence in the US debt as well the FED chair. So I think this market believes that the 5 or 6 mega caps are in better shape, they have better financials, they have enterprise and ability to fight thru this period of uncertainty. This is why I think we are not seeing a more sustained sell off.
Now just due to the way these mega caps are such a large part of the S&P500 and the NASDAQ, it makes it that much harder for the index to drop if the top 5 stocks remain propped up.
I personally think for a more sustained sell off in the indices, we need to see a couple of closes in the NQ below 14500 and in ES Emini below 4230 or so. We are now 14900 and 4290 respectively.
Scenario 1: Dips into 4240 could be bought for a retest of 4280, unless we were to close below it on the intraday time frames or the daily time frame.
Scenario 2: For trendy one way move, I think we will need to close the intraday time frame above 4300 to target 4330 or below 4240 to target 4200. At time of this post we last traded 4290. For intraday time frames, I myself use 5-30 minute auctions. Anything above that I feel is overkill.
BTW if you have not already, start your own Substack and link to mine. We are seeing mindless content generation and consumption on Tik ToK and insta. I think any one create meaningful content about hiking, cars, travels, cooking, dogs and cats, eating out, etc is great to be shared on Substack. Look forward to see you on the Stack :)
~ Toc
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