Weekly Plan 4/3 '22
Traders-
Welcome to the new quarter (Q2) and another installment of my weekly plan. Q1 was a tough start to the year for equities. SPY ended the quarter down about 5% and QQQ down about 9%.
I do not think volatility is going away any time soon and may rear it’s head soon again. I expect strong headwinds to the markets this quarter, whether that is from the tightening monetary policy, shrinking fiscal stimuli or expanding geopolitics risks and increasing inflation.
If this was not enough, sprinkle in seasonality and potentially hit to the bottom line of companies reporting in Q2 due to supply chains and increased labor and material costs.
In this installment I break down what I personally see play out in the market, a couple of my other ideas as well as the levels on SPY and Nasdaq NQ which I will be watching next week. I build on last week’s newsletter where I became bearish with the expectation that rallies into 4612 may get sold and in fact we saw sustained selling once we reached those levels. This newsletter I will share a KEY level which will invalidate my bearish bias and opens the doors to 4700. Read more to find out.
I am also sharing a few themes in energy and how I see them play out over next several months.
For new readers, I recommend you read these prior weekly plans so you are aware of the levels and events leading up to my current thinking…
Weekly Plan 3/27 '22
Chart A Emini Weekly Auction
Chart A represents my bias technically. What this shows is a bi-nodal weekly profile that has closed right above the Value Area of prior week’s stubby profile (A). A Low Volume Node (LVN) at B represents that the dip buyers have been active last week but for their efforts, they did not quite get the desired results. This could turn to a rout, given conducive conditions next week. More on that and levels later in subsequent sections.