Red Everywhere!
Daily Plan 8.18.23
Hey guys -
The session today is one of the reasons why I refused to believe that the volatility and bear market shenanigans were behind us for several months now.
I have been consistently warning that this type of market has not entirely gone away and it will be foolish to believe that some new sort of a bull market was born in 2023.
There are many major reasons for it which I have been sharing with you over last several weeks, so I will not go into each one of them again here today. It does appear with the close today in a couple of hours or so, we will close about 250 handles lower than the most recent swing high at 4630 in the emini S&P500.
Several other stocks either already did or are on cusp of falling back into a bear market- for instance TSLA is now down about 30% from its 52 week highs. I became a TSLA bear at 270 with my target at 210. At the time of this post, we are trading at a handful of points from this target.
If we are indeed going to fall into a recession, stocks like TSLA are on my list to be hit the hardest. Amongst other names are the likes of AAPL and NVDA.
Are we going to fall into recession?
You tell me. My data all seems to suggest we already are in one.
Regardless of the outcome, I will be sharing my watchlists with y’all, whether it is bull or bear market. So, stay tuned and subscribe and share my newsletter as it is supported by readers like yourself. The more you share, the more of an incentive it is for me to share my levels as well as no one likes to work in a vacuum but collaborate and share.
So, from the session today, that bounce off 4410 key level was very weak.
We managed to find sellers on that upper LIS where we barely did any trading today before about a 50 point drop later on in the session.
The session today has firmly established bearish territory; I think we are about to close here below 4400 for the week unless something changes dramatically tomorrow.
The main macro factor now is that the econ data has substantially weakened, whereas some of the inflation data seems to show inflation tick up again.
This is not a great place to be in for a system/society heavily built on debt and leverage.
Now there was some hope that the FED will come to the rescue. Based on most current communique from this FED, they seem to be in no hurry to bailout the markets yet. I actually think the FED will heavily bailout everyone and, in the process, will end up printing trillions more in new dollars. However, I think it will not be when the S&P500 is here at 4400-4600 but it will be closer to 3500, I think.
My key levels for tomorrow
For now, let us dial back to the tomorrow.
4371 is my main level for tomorrow. At time of this post, we traded around 4380 on the emini S&P500.
Scenario 1: As long as 4371 holds in the session tomorrow, I think we could retest 4410.
Scenario 2: If we give up 4371 fairly early on in the session, IMO things could escalate, and we could see a larger sell off into 4330 Main Order Flow level.
Longer term, 4410-4430 remains in focus now. I think if this area becomes resistance, we could begin chipping away at 4170. If this does go down, we are then talking about a mere 10-12% from some of my longer-term levels which I have thought about being tested at some point. This is why I have been saying all along, I still think this is not entirely out of the realm, given the built up of uncertainty around macro picture for next year or so. However, for this to come to fruition this Fall, the bears cannot afford to lose this 4430 level IMO now.
On the NQ side, I would think 15000 could be an important resistance now. I think rally attempts into 14900-15000 could get sold to retest 14000 level. Now about 14750.
As far as some other names like TSLA go, I think 230 now may be a strong LIS to cap rally attempts to see a test of 190-200 again.
In other markets, we did see some signs of life in TLT towards the lows today, but I think if we begin chipping at 90 level, this could dramatically escalate. This is pursuant to my note a few days ago about weakness in TLT in particular and about bonds in general.
~ Toc
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