Daily Plan 2/24 '22
Hey folks-
Today we close near the 4200 level and it marks the full round trip of my bracket which I shared in January from 4200 to 4500 and then back down from 4600 to 4200. My longer term expectation is a bracket formation between 4200-4500 before a break higher into 4700. Are we there yet? Read on.
800 point round trip, in little less than 8 weeks. This is tremendous volatility.
While is is easy for many to say I am bullish or bearish here and come up with some random targets, as an active trader I must first take care of the downside risk and then try to come up with some targets. I need to answer if I am making the play as Investor Tic or Trader Tic . If I am investor Tic I am willing to endure larger DD than let us say the Trader Tic.
So I ask myself, we are here at the expected lows. Are there any signs that the buyers may be stepping in? And depending on that answer, I define my next steps and levels.
For the Investor Tic, the answer is that we are close to meaningful lows now. May be there is another 100 point downside for the 4220 close today due to current macro but longer term, Investor Tic thinks we test 4600 and higher. For Trader Tic, a DD of 100-150 points is simply unacceptable so I need to fine tune my entries. While my weekly newsletters are more geared towards Investor Tic, the newsletter tonight is more for Trader Tic.
In this post, I will cover my thoughts on the action tomorrow, a couple of price scenarios and my reason why I got bearish at the open today at that level 4333.
The close today was not an ideal close from a Trader Tic POV. There are few reasons for this:
We closed very near to the January lows.
We did not offer much fight at a key level - 4250.
There was heavy trading at the session lows.