Daily Plan 8.11.23
Hey traders-
Would love to have some feed back what you will like to see more from newsletter. Please, the feedback should not be if we can see the market move in one direction all day. This is a very tall order indeed as 7 to 8 days out of 10 tend to be balancing which means the markets love to range. It is nice we have these 60-70 point ranges right now which create a lot of 2 way traffic which creates opportunistic levels.
Trend days are far and few and a robust methodology should be based on range bound conditions rather than outright trend.
For some folks, all this volatility is good. These guys usually tend to be active in market 4-5 years or more. If you are super new to the markets, you have probably not seen this before but this is fairly normal. In fact what we were seeing last many months was not normal. It is not uncommon for this market to move even 50 points in a minute or less. It has happened before many times and can happen any time again. Right mow we are seeing 50-60 point moves in a session, however that is not to say we can not again see a 50 point move in a minute or two.
The key takeaway from this if I am super new to this is that I watch and learn from this price action. For more experienced traders, they can adjust their stops and their targets based on the volatility and this is therefore natural for them. If the action today is an indicator, I think the volatility is just starting and will get more intense for rest of the year.
I will not go into all the details but today was also an exceptional day for short term trading in my view. Most of these levels were shared with folks in the email last night and then again in the chat room today.
The session was capped off by extremely heavy volume. More on this later.
Some other names did very well today; like DIS which I have been bullish on from 84. BABA which I have been a bull on from 80 and then 90. Uber which I have been a bull from 30 , Oil had another good day.
Folks, on an admin side note, if you like the levels and my ideas, consider sharing and promoting this newsletter. More promotion from folks like you mean lower prices for everyone. These prices are affordable due to support from traders like your self. TIA!
I think the pall that is hanging on this market is due to the bond yields, in particular TLT being very weak below that 101 level I shared many days ago.
With the price action today, we closed near recent support which has seen 4 out of 4 days in a row a bounce from these levels I shared in my weekly newsletter.
My levels for tomorrow
First off, when the general market is this volatile (relatively) it is not super easy to find good set ups in the other stocks. This is especially true when you have a very high beta stock like TSLA. So if the market goes down a percent, then TSLA goes down 4%.
With heavy volume in the session today, my key context for tomorrow will be that we need to hold the 4470 level early on in the session, else we are looking at a test of 4410 area. At time of this blog, we last traded 4490.
From news perspective, I am watching the consumer sentiment at 9 AM central tomorrow which is half an hour after the open.
If this number comes in weak, I think the market could sell off below 4470.
It is expected to come in around 71.5 and I may share it in the chat room tomorrow with my updates levels.
Due to the news flow tomorrow, I do not have formal scenarios but I will lean on 4507 as bullish support (if above it) and 4470 as bearish resistance (if below it). On the NQ side this translates to support coming in at 15000.
I will be updating in the chat room. However outside of the PPI or consumer sentiment, markets like Oil are quite key. If the deflation wave is coming and economy is about to fall off the cliff, we need to see this shown in price action of oil which is the global harbinger of risk on/risk off. I think if we continue to see Oil perched above 82.5, on that instance also we could see support come in near 4470-4480 again.
WE
On other news front, we saw an immense rally in WE stock today about 50% today. I have shared my view on this stock. The company is saying they may go bankrupt which is always a risk for a stock like this and could have potential to cause more moves like this. I think if it holds 15-16 cents, it could retest 22-23 cents.
VIPS
Have been a bull from 10 dollar area. Now about 17 and change.
Earnings next week.
I think if this 16/17 holds, we could see a 20-21 on VIPS.
To summarize:
Tomorrow is going to be an immensely important session in my opinion for next 100-150 points in the Emini S&P500.
There is a lot of fuel here now (volume from today).
There is clarity on CPI and PPI.
There is general consensus now on support and resistance (from last weekly plan levels).
Last but not the least there is consensus on oil prices and will be a sign off on state of the economy tomorrow with consumer sentiment.
With these factors, I think tomorrow’s move will not be a fake move and if support is broken that should lead to an enduring sell off into 4400. If the support holds tomorrow and we actually close above 4507, I think we are going to test 4580. We have closed now at 4490.
Personally, I believe a sell down into 4410 is not such a bad idea and could lead to some more volatility which is better than ghastly 20 dollar ranges all day! Amongst related markets like Oil (82.5) other key related markets could be AAPL (180).
Have a great weekend!
~ tic
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