Has the Music Stopped?
Daily Plan 6.24.26
Hey folks—
We had some good trading in emini s&p500 on the intraday time frames from the chat levels where both the low and high were pretty much within our support and resistance zone.
A couple of things— there is some degree of chop in this market at the moment. The reason for this primarily is that I think stocks on balance remain overbought. A very good example of this is the leading stocks like Micron which I estimate to be about 30% overvalued at the moment.
Now there are 2 ways to deal with it— first being you have to accept this facet of the market action and be ok if you are going to sit thru the chop. Remember, a lot of these stocks whether it be NVDA, SPCX, TSLA, MU, Intel pick any really— all of these have been shared first by me here at prices much lower than current prices with the exception of SPCX . With SPCX, for our substack folks, the trade really was to buy the IPO not buy it at 222! I hope this was clear to everyone. 150 and 222 are very different buy points. Obviously.
The other way to deal with this is don’t trade until fairer levels prevail. I think if you ask me a really decent place to go long without dealing with chop and vol is to wait for 6900s. That may or may never trade anytime soon, so that is a risk in itself. I also use something like SPMO 0.00%↑ to gauge the frothiness in the market and I think if it were to trade down to 130-140, it could be a great setup for bulls. It is 155 at the moment!
At end of the day this is for you to decide. If I never bought a NVDA at 100, at a 160, if I did not have a share of micron at 80, at 300, then obviously it is a little iffy buying it now here close to 1200!
This sort of behavior is very common in markets and it is its feature than a bug. Now we have folks from around the world, from readers who trade 1 second time frames to 1 trade a year. This is all about your personal style and what you are comfortable with.
Now on the emini side, the fact that we held the lows today near 7403 is a plus. If we continue to hold these levels, then we need to see what kind of action we run into if and when we go back to 7500.
We can still lean on these levels from today into the day or couple days ahead. But do know that the more the market gets stretched, more violent these moves can be.
What I am thinking at the moment is that since that FOMC the rallies are getting sold, and we should lean on that unless the market gives us a reason that is behind us. So, in that context, I will say rallies into 7500 could continue to get sold unless we begin closing above it.
On the downside, we can see support coming in at 7403 or so, until broken. If 7403 is broken, I think we lean on this for a push lower into 7310.
One of the key reasons for market sluggishness is the dollar. If you pull up a dollar chart, this is looking like it wants to go up. A dollar that clears 104-105 (it is 101 now) can cause all sort of market plumbing to begin leaking.
On top of that, a lot of these market leading stocks like Micron could frankly use some airing down.
This is it for now. Make sure you install the chat below for urgent messages during market hours. Better setups will come, it is really a waiting game at the moment as various moving parts are in play at the moment — an opaque FED which may be actively gunning to lower asset prices, a surging dollar, generally overbought memory stocks. If you read about the Taiwanese and Korean stock markets, you will see folks there leverage to the hilt, taking loans to buy stocks. This is all not a good combo to chase but instead let the market come to you.
~ tic
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