Weekly Plan 7/10 '22
End of the Beginning
Traders -
Not a whole lot changed in my longer term view of things so I would not delve a lot in that, longer term readers know my view and I have included recent weekly blogs to reiterate. I have included shorter term levels and my thoughts on oil, gold, earnings of TSM, JPM and UNH in this installment. Enjoy.
At start of the last week on Tuesday, we sold down from my key level 3851, exactly into 3750 which was my lower level for the week. I had expected further sell off to come only below 3750 which was rejected and we sharply rallied above 3800 on Tuesday night. This was a pretty sharp move and pretty much was done before Monday night-Tuesday night.
It is here that I started anticipating a retest of 3900 and I expected further bearish action will be hard to achieved as long as we remained above 3800. A lot of participants fully bulled up by Friday close however I was one of the very first to acknowledge we could retest 3900, as early as Tuesday night. Here is my plan from Tuesday night. On the NQ side also, I was one of the first ones on Tuesday to call for a test of 12300/12400 once we bid above 11625 order flow level. Nice rally in Nasdaq indeed.
Other calls made by me did also very well. For instance, I called GOOG as potential support at 2250 if it dipped there on Wednesday. Well, the dip came and the low was barely 2245 before GOOG rocketed off, taking out my target at 2330. Eventually it almost rose to 2400.
Roblox was also a great call that went from 37 to 43 within days. The best part about these calls was not just the moves but the fact how little they traded below my Line in Sand (LIS).
I was also bullish on Oil at 96 and change before it sharply rallied almost 1000 pips to close near 105. On the PM side, I expected more softness in both Gold and TLT , both of which turned out to be correct thinking from last week’s plan. Link below.
Before diving deeper into my thoughts for this week, longer term, the notion that the stocks have bottomed is a strange one for me. Yes, a lot of stocks have sold off heavily and may be close to some type of bottom but I think S&P500 could still grind down for few more months. The long term readers to this publication know my thoughts on this topic. I believed 3666 will present a potent support to S&P500 before the earnings season kicked off and that seems to be still holding. I would not be spending much time revisiting that thesis as my personal view has not changed significantly. For those who are new to this blog, please read my last 2-3 weekly plans for more on that. Links below for reading my thoughts on longer term auctions.
Note my definition that a low is in is that we are now ready for making new highs on higher time frames (new 52 week highs). What we are seeing right now in my personal opinion is a counter trend rally and I have called many of these my self. More on this later.
This is the CPI week as well as we kick off the earnings season this week with major banks going at it first. I have had good calls in earnings previously and I hope to keep it up this quarter as well. I will be sharing my earnings calls, my levels and thoughts with the Substack subscribers here every day. If you have not, consider subscribing to my newsletter for up to 5 such posts every week.
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Talking about the key events next week, including the CPI, I want to highlight some recent key economic indicators that I have been watching.