Daily Plan 4.10.24
Trader friend-
For a casual observer market moves are random.
There is no rhyme or reason for these moves.
Without warning we seem to sell off and without any notice, we seem to rally.
However, when you look at my levels like 5280 and 5206, you wonder are these moves really random?
Believe me there is nothing random about these. These are cold hard orderflow moves.
However, these moves can’t be found in indicators which are past tense. They are history. Market is alive. It is changing every moment as orders for buy and sell come in. Many of us are working long hours and some of us have been called back to our corporate desks, and are not able to find these levels on charts.
This is where I have done the heavy lifting. I watch these markets 6-7 hours every day, I watch the volume and orders at every single level. And I share these levels with y’all.
The result is move down from 5280 into 5206. And then from 5206 almost back to 5280. In one session. A 150 point move. In 6 and a half hours. I will continue to share levels as long as the blog enjoys support from folks. Show your support in any way you can. Sharing, liking and subscribing are some of the ways to show your support.
Subscribers get access to all ideas not just my emini levels but my levels on stocks as well as Gold, Oil, FX etc
BIG CPI Day tomorrow
I do not like a super formal plan on CPI days due to extended volatility. For instance the SPY straddle for tomorrow is almost 5! I may share some updates in chat room in the AM, before open.
Generally, the weekly levels still remain in play. Here are a few price action thoughts. The idea behind these scenarios is to have some sort of framework to compare the open tomorrow to key auction levels and glean some clues where the auction may be headed. At time of this post we last traded around 5270.
Longer term if you look at the S&P500 composition, some things are very interesting.
The largest 3 constituents are MSFT, AAPL, NVDA with about a 7%, 6% and a 5% weight, respectively. 3 companies account for nearly 20% of the weight of a 44 trillion dollar market. Historically this does not bode well for these type of stocks.
Then you have the likes of TSLA which are nowhere now to be seen in top 5, or even TOP 7. It is more in line with where it should at about 1% weight, same as components such as XOM.
Longer term I still think as long as these 3 mega caps represent 10-20% of the total index, there is enough fluff to come out of the system. However, this will not be an instant overnight resolution. How long did it take for TSLA to fall from 400 to 160? How long did it take for XOM to rise from under 30 to over 120? These things take time.
In the intermediate term, you have this dance going on around 5250 which was a recent breakout level. What is helping the bulls in new highs in MSFT, GOOG and AMZN. As far as AMZN &MSFT goes, I called this move a few weeks ago when AMZN was at 160. With GOOG, I personally think it is undervalued compared to its peers and could still see further gains along with MSFT and AMZN which looks robust. Then the other elephant in the room is AAPL. What do you do with it here at 170s? It has been consolidating here and even a small move in AAPL can cause a large move in the main index, due to its weight in the index.
Given this context, I do think that the market still could be supported on a move lower. Now as far as tomorrow goes, I favor this level to be closer to 5200 than here closer to 5300. I favor a rise in volatility that gets subdued later in the session or even this week.
With this said, below will be two broad scenarios I will lean on tomorrow.
Scenario 1: If we dip into 5230, I expect this level to hold for a move back into 5248-5256.
Scenario 2: If we are able to take out 5230, or open below it, I expect support to come in near 5170-5200. As said earlier, if I see an interesting set up, I will share my personal views in the chat room which is free for all subscribers.
PANW
I was a big bull on cyber sec stocks before their massive rallies but they have now since been subdued.
With PANW, I favor recent lows near 270 to act as support for a push higher into 300. It is about 278 right now.
~ tic
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