New Bull Market Begins?
Daily Plan 10.12.23
Hi Folks-
Main expectation today was to see support come in near the levels shared by me last night and I had reiterated this in the AM with my chat room update about strength in TLT.
Below 4408 we tried to sell down below this key order flow level, failed, and then rallied all the way back to 4408 at time of this post.
Some other names I shared a few days ago saw good action. Specifically, we saw new highs in GOOG, as well as NVDA. SMCI rallied from 250 to close the day near 310.
On top of this, I also had an excellent call on Gold which is now up almost 70 dollars on the week from the lows.
Bitcoin
Bitcoin has been under some pressure below a key level of 28000 and is now trading right under 27000. This is quite surprising as inflationary pressure eases as well as geopolitics risk increases.
I think Bitcoin, if it remains below 28000, could remain weak and head towards 22000.
TSLA
Tesla and Bitcoin have good positive correlation. My key level in TSLA has seen it supported not once, but multiple times.
Now with cracks appearing in Bitcoin, I think TSLA, if it remains below 270, could see 240 retested. It is near 263 at the moment. There was a lot of bearishness in TSLA due to earnings and delivery numbers which I stated will not matter much near 240. I was quite right in that assumption as we saw sharp rally from there.
However now with the quarter earnings about to begin, some of TSLA delivery numbers may come to haunt it, as long as it remains below 270.
My levels for tomorrow
CPI day tomorrow is the big wild card. However, we are also about to fill some key gaps like in AAPL near 182 and in SPY as well.
Outside of technical levels, you have to ask yourself what can bring sellers in again?
Is it the yields?
Is it the dollar?
Is it the FED?
Is it the CPI tomorrow?
Will it be the mega caps weakening?
#1 thru # 3 has NOT mattered in recent weeks. So what additional factors can be at play here? A common theme seems to be that the bonds heading higher is a factor for the stocks also rising. However, this presupposes that the FED can control the longer dated yields. What if it can not?
My bearish case for the S&P500 will be Iran getting involved in this current Middle East conflict which I think sends Oil much higher (above 100). Iran is flush with recent injection of cash and can withstand more sanctions. This I think will lead to more stimulus, however, the yields may still have to go higher to support this spending and this I think will bring a death knell for risk on, growth type names.
What do you think?
My key level for tomorrow will be 4430-4450. I do think a lot of current flows are being driven by sheer magnitude of bearish sentiment. AFAIK, I was one of the very few folks who was bullish at 4250 for swing time frames and I had expected this 4450 test which was shared by me several times.
It is kind of hard to grasp the pulse of sentiment at the moment, but I think as the bearish sentiment wanes, we could see bearish pressure return. Based on my own interaction index, I do think bearish sentiment is still not completely subdued and may need some balancing to recede. May be a couple of closes here above 4400 can do that.
Scenario 1: Generally, I think if we are able to take out 4450 and remain above it, this may be supportive of risk on sentiment to push into 4480.
Scenario 2: Unless we take out 4450, it may act as resistance to retest 4410.
At time of this post, we last traded near 4420.
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~ Tic
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