Bear market begins.
Daily Plan 10.16.24
Hey folks -
Seemed like a never ending one way sell off today, but in reality we sold off 70 dollars from the overnight highs. The sell off felt more vicious due to recent lack of any sort of volatility.
While the general index sold off about 1.5%, it is the stocks like NVDA and AMD, which I have had a bullish view on, took it on the chin, shedding 5% each.
The semi sell off began on heels of ASML’s abject and gloomy description of demand scenario out of China. This caused across the board sell off in the semi stocks globally.
While NVDA is at a technical resistance, stocks just don’t make an all time high to immediately reverse in the other direction. I need to see if we begin to lose some of the important levels like 125 on NVDA to think that this thing may have legs.
Now as far as the action goes today, I did share last night how participation from large bank traders is key for these markets.
We had that nice run up on Friday which was carried over into Monday. But Monday was a bank holiday here in the US and Canada.
There was very little sponsorship from larger bank traders on Monday something which I warned about last night. We opened below 5920. We lose 5903 early on in the session, the next logical target, per my plan last night, would have been 5860 and that is exactly where we went in the cash session today. I seriously think minus that ASML news, we would be trading 5950s today, rather than here at 5850s.
Key levels for tomorrow
We have the weekly key level right here below us.
I cannot be bearish unless the bears take this level and we begin closing below it.
Scenario 1: As long as we hold 5822-5830, I think we could see some support and we may retest some of the levels from today around 5882.
Scenario 2: For further bearish raid into 5792, I like to see the market take out 5822 and remain below it for rest of the session. We closed for business at 5850 on the day.
Part of the problem from a marker perspective, is also with the strength in Dollar index, which again all common consensus, I called a bottom on at 100.
It has since risen back to 103 and is exerting some pressure on stocks but I personally think this is not an issue. If anything I think this is good. Dollar starts becoming a major worry for the bulls once and if it begins crossing above 106-107 which to me is a sign of something major broken in geopolitics or some other severe risk-off scenario. We are not there yet.
On the SOX side of the house, pretty rough action today, but NVDA has this 125-126 level which I believe personally is quite important for the bears to take out, else we could head back to 140s.
~ tic
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