Demoralization sets in
Daily Plan 10.26.23
Traders-
The market opened at my key level and remained below it all of the session with not able to rise above it at all. Eventually, it sold down into 4200 key level.
There was a sliver of hope after META reported fairly good earnings, combined with good forward guidance. However, this was not enough to stop the bleeding and market continues to pummel after hours.
Is this the end? Do we see a limit down next?
The context, coming from the META earnings, as well as the key central bank hawkish statements, like the one from Bank of Canada, combined with a break of a key technical level is a pretty negative.
Only 2 years ago, such good earnings will be rewarded with a 10-12% move for a stock like META. However today, the reaction was muted. On top of this, you have the ECB on tap tomorrow followed by the inflation data on Friday.
I think in such an environment, both 4170 and 4242 could be important levels for tomorrow’s cash session. We traded near 4190 at time of this post.
Just glancing thru my context and levels, I think this is extremely bearish. However, there is also a main technical level right beneath us at 4170.
Now longer term, I have predicted this and this is not a surprise. However in the shorter time frames, the moves are not always one directional.
This is why I think we could test 4170 but further bearish auction depends on if we are able to break 4180 or not in cash session.
On the upside, the bears are in control and could prove resistance near 4242, so the bulls have the double task of A) prevent a break of 4170 to stop complete demoralization and B) take out 4242 which now could be short term resistance.
~Tic
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