World War 3?
Weekly Plan 10.8.23
Dear traders-
For those of us who are regular creatures of the markets, there are no absolutes but we only operate within the relatives. For regular folks, they are in search of certainty and surety, however based on my experience of 20+ years, there is no holy grail in short term price action.
This is a world where there are no rules, no structure.
In a world without structure, one can only have references, but one should not spend a whole lot of time looking for holy grails. Yes, you can spend years of your life searching for a holy grail in indicators and in systems, but I am reasonably sure it will be vain.
Why do I say so?
Because I have tried everything out there. And based on my own first hand experience, I know there are no certainties, no guarantees, only probabilities. Using a methodology like OrderFlow, which is basically a study of at bid and at ask trades in real time, I can come up with levels and there can be a certain probability of may be 60-70% of that of a particular level holding, but any one who is saying there is a 100% chance of something happening over something is either delusional or lying.
This is really not to discourage any one from pursuing a 100% sure shot system, by all means, be my guest. But I am offering a realistic picture of what is possible versus day dreams.
Folks, on an admin side note, I received some feedback about some grammar issues in the newsletter. FWIW, I spend considerable time, running into several hours, to prepare the ideas for the newsletter. My focus is to share exciting levels and context for the readers. I admit I do not spend a lot of time worrying about Grammar. I hope this is ok as it allows me to focus on what I do best - share the context and levels like 4250 from last week. For most part, the content is written to be easily understood by folks from all educational backgrounds and nationalities. However, if someone is having a hard time understanding the gist of the newsletter, drop me a line and I will be happy to address what is possible. This is also a good time to reiterate some other admin stuff. As far as billing goes, I have 0 control over billing issues. These type of concerns should be mailed to support@substack.com. They are a solid team and will help you out, but please do not contact me with back office issues. In case they do not help you, I will be happy to jump in. Last but not the least, I will never personally contact any one selling any mentoring, trade copy services, or signal services. If someones does, please block and report them as soon as you can- they are trying to scam you. Do you want to get scammed? If not, please do not interact with any one impersonating me, trying to sell you any type of courses etc.
This past week was an excellent week for my emini S&P500 levels where I was able to navigate the choppiness by neither feeling bearish at 4230 nor feeling super bullish at 4350. In fact, I shared an excellent plan on Friday, hours before the NFP news where I thought the dips into 4230 could be supported. I thought this could lead us into a bounce into 4300, but little did I imagine the price movement on Friday. It was a full 110 point day volatility, measured from the session low to the session highs. This move from almost 4230 above 4350, ensnared a lot of folks who were overtly bearish due to the NFP.
From my perspective, the Econ data has currently taken a backseat. The yields have taken a back seat for the time being. What is front and centre is the unnatural strength right now in the mega cap stocks of NYSE.
I have seen this earlier in the year in January and at the moment the same script is playing out. I have no comments on whether it makes sense or not but you can not refute the results. There are barely any dips in the mega caps. NVDA, TSLA, AAPL, AMD, GOOG, you name it- they all had pretty good week last week. With this ongoing strength in the mega caps, it has been harder to sell in the indices. They have been bought on every dip last week.
If you look at my updates, I called for the support in TSLA at my 2XX level before it rallied some 25 points, I called for support in NVDA at 420 before it ran to 460 this week, I called for bullish continuation in GOOG before it slammed almost into 140 this week, in SMCI, my 250 level held quite well before it closed on Friday breathing down on that key 300 area.
Can this continue?
This is an important post where I analyze the near term as well as intermediate term action and factors that may be helping and weighing down on the current auction. I also analyze the war unfolding in the Middle East and how I see it play out in the short term. In particular, I think this will devolve into a much larger war than a typical Hamas and IDF encounter. I share my thoughts on how that will play out below.