Daily Plan 12/8
Why I turned Bullish at 4539
Folks, slightly different format today as I am getting a lot of response (mostly negativity) that why I flipped bearish to bullish over the weekend. To address this, I have added section C for those curious to understand what was different at the lows on Friday. I saw something on the order-book . This was the MAIN reason for me not wanting to be short, if we remained above 4500/4539 this week.
At end of the day, it is all about learning and getting smarter. If we can take away one thing from events of last 3 days, it is this: be nimble.
The plan is also out a bit sooner today as I will be on the road the rest of the day and wanted to get at least a couple of levels out.
But first off, let us recap the session today.
I was bullish coming in today as we opened above all my order-flow pivots; which is 4565 and 4590.
I gave 4590 at yesterday’s close and the low of the entire day today was 4588. 4588 was my LIS for scenario number 1. See daily plan from yesterday: Tuesday Plan
At the open I expected a small pullback into 4620. We opened at 4650 and quickly tried to take out 4656. Which failed temporarily. At this point I sent the tweet below. I did not see any kind of weakness at all on the tape.
Within moments after my tweet, we took off 🚀🚀 and are now trading 4692 closer to 4700 at time of this post. Make sure you share my post if this tweet added value.
Now is this going to continue , will we continue to melt up?
To answer that here is what I have gleaned from the tape so far and my levels for tomorrow:
My Plan and Levels for tomorrow:
The following conditions are in driver’s seat right now:
A lot of people were caught long at 4700 in equities and short bonds when Jerome Powell made the bombshell announcement tp taper and retire the term “transitory inflation”
They are not in long positions right now in my opinion as many of them got short at 4500 and as a result we are seeing this short covering rally which may have legs.
A lot of participants are also realizing that inflation may not be as bad as previously thought. With oil and natural gas down to acceptable levels, the pressure off Powel to do something urgently eases.
There are also natural tailwinds from the so-called “Santa Claus” rally. Why ruin Christmas?
With this backdrop, I have the following three (3) price scenarios for tomorrow: