Daily Plan

12/7/21

Traders-

S&P500 got many got caught on wrong side of the tape and short over the weekend. It is still Monday and a price dip may come to the rescue. However, see my play for tomorrow with respect to which levels may cause a sell in Section B.

Section A: Session Wrap up (Monday, 12/6)

This market is the most mean reverting market there is. 4500 being SO oversold on many time frames, presented as an unfair price for new shorts. Rest is history.

As for me, I was myself bearish on Friday afternoon and we closed right at the 4539 order flow pivot. I typically do not hold overnight and certainly not over the weekend as adverse gaps can be quite large and take the starch out of start of the brand new week.

I shared the following context (Figure A) and analysis from the tape in my Weekly Plan on Saturday. I thought if we traded above 4500-4539 this may be bullish and that is exactly how it went down today. Not only did we open way above 4539, we did zero business below 4539 (in Globex as well as in cash session).

As of this blog, my target of 4610 has just been achieved. In fact 4610 was high of the day today as of this blog. 4639 was exact low of the session today.

Figure A: My context for why 4500 may have been the temp low on Friday

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In Figure B I listed my levels and why I would not be bearish if we traded above 4500/4539. We opened way above 4539 today and could not trade any lower. Even the Sunday night open was above my 4539 which was the first red flag for any one wishing to remain bearish overnight.

Figure B: My levels for how I planned to play this week

Here is a link to my full weekly trade plan for those who have not yet read it: Tic Weekly Thoughts

BTW make sure you read my brand new educational post on Momentum: Momentum Intro by Tic

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Section B: My levels for 12/7

Here are my main scenarios for tomorrow. I will validate these with overnight conditions as well as the market internals throughout the cash session tomorrow.

1. My order flow pivot is 4592. This is a key level from last week and may decide the outcome for tomorrow.

2. If we open or bid above 4592, I think 4590-4592 may provide some support and a test of 4610-4620 may be made. Upon taking out 4620 on strong volume and bullish internals, we may target 4633-4637.

3. If we open or offer below 4592, coupled with bearish internals, a test of 4567, another key weekly level may be made. 4567 then may attract more buyers. Validating it with other factors like related markets, internals.

4. A tertiary scenario of open or offers below 4567, in my opinion opens the doors for a test of weekly support zone at 4539-4545.

While these are my intraday levels, longer term S&P500 is within prior week’s range. Decisive trend becomes clear only on a Daily close below 4500/4539 or if we start closing consistently above 4580-4620, we may take off 🚀 and target 4700.

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Tic 🍀

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