Daily Plan 12/2/21
Have we bottomed yet?
Traders-
A) Four things, not coronavirus variants like Omicron are driving the flows in markets currently:
Progressively lower moving value area
Multiple Failed Breakouts which do not seem to hold
Lower Lows and Lower Highs
Powell’s testimony about taper
See Figure A for a graphic representation.
Today was an extreme day compared to the averages of this year, we traded 2.5 million contracts and about 250 points of measured moves. Tons of opportunities both short and long. However, it is also quite fatal if risk management is not sound.
My Plan called for bullish action as far as we opened /remained above 4600, with my target of 4650. This was achieved by noon. 4650 was in fact the high of the day, before we took that 150 point elevator down from the highs.
See below for the plan for 12/1, if you have not already reviewed it: Daily Plan 12/1
B) What’s my plan and levels for tomorrow:
Tomorrow’s session may be complicated due to many factors.
We are extremely oversold. The breadth absolutely stinks. About 2/3rd of all NYSE stocks are trading below their 200 SMA. This is quite gloomy.
Right now there seems to be misinformation doing rounds in the market that the current sell off is due to the Omicron variant. This is letting some bad actors spread rumors and cause large sized adverse price movements to their benefit and detriment of misinformed traders.
Conflicting signaling from the admin: from the President himself to the Science Czar Fauci, and then the deviation between Powell and Secretary Yellen. Morale is low.
All of this calls for one thing and one thing alone: being very nimble and adept with the levels. While I am learning towards selling rallies for an eventual retest of 4400, I can not be outright bearish here at the lows 4511!
Here’s a few price scenarios that may or may not work tomorrow, however they allow me a low risk approach to play the market. As always , I like to recap the session every day for the subscribers and provide daily levels, today is no different. Note this is the 2nd day in a row I have not listed any equities that I am playing. It is just because I am not seeing a whole lot of opportunities myself in the market right now for long term swings and holds.. I will share those once my scanners start picking some winners again.