Bulls Need a Rest
Now we see where support comes into play
Due to a brainfart on my end, I did not realize today’s Game Plan failed to send. Here’s today’s piece and apologies on the delay.
Technical Edge —
NYSE Breadth: 67% Upside Volume
Advance/Decline: 69% Advance
VIX: ~$19
After Friday’s late-day spill, I was looking for the market to come under some early pressure this week. Even when I was watching the Chiefs vs. Bengals game, the ES was struggling. That said, I did not expect the S&P to be down almost a full percent in Monday’s pre-market session.
Market-wise, we’re in an environment where we’re enjoying a really nice burst of bullish momentum, but we’re still in a bearish market with rising rates. Yes, they are not rising as fast and may soon stop rising altogether, but they are rising nonetheless and that is no friend of a bull market.
What I want: Ideally, the market will give us a couple days of rest. Whether that’s sideways action or lower action, I don’t really care. But many individual names — like TSLA for instance — need a rest so we can have a better R/R when we approach these setups.
S&P 500 — ES Weekly
Leading off with a weekly view of the S&P futures, we got out first close above the 50-week moving average since early April. It’s our first close above downtrend resistance since the ATHs more than a year ago.
We now have a higher low in the books. The question is, can we get a higher high too, by taking out 4180?
That’s what the bulls will want to see and this week’s Fed and big-tech earnings could be a big part of that equation.
If we zoom in to the daily, we can see that the ES is finding some support in the 4040 to 4050 area, which was a trouble spot for longs last week.
If the ES takes out the Globex low after the open, keep an eye on that 10-day moving average at 4020 to 4025, which comes into play right between the 50% and 61.8% retracement.
SPY
I’m not sure that we’ll see $400 to $400.50, but it’s the first significant line of defense for the bulls. There we find former resistance, as well as the 50% retracement.
Below that puts the 61.8% retrace and 10-day moving average in play.
Aggressive bulls can look to see if we get an opening bounce of the $402.50 area. There we find the 10-ema on the 4-hour chart, as well as the high from Monday.
AQUA
I would still love a test of the $45.50 area.
Open Positions
A note: After talking to some members, I want to make the setups a bit more clear. We are a trade-ideas service, but want to make entries & exits simpler to understand. We will be sending more updates, a few educational pieces and looking for a way to make our setups more clear in how we are managing them.
Numbered are the trades that are open.
Bold are the trades with recent updates.
Italics show means the trade is closed.
— Any positions that get down to ¼ or less (AKA runners) are removed from the list below and left up to you to manage. My only suggestion would be, B/E or better stops.
From this latest round, that includes TLT, DE and FSLR.
COP — Long from $119, the 2x weekly-up. Trimmed ¼ at the 50-day. Still watching $123.50+ for the next trim. Can technically raise stops to $118-119 or B/E, (whichever suits your style better).
If still long, $127 to $127.50 is the next trim spot
NKE — Down to ⅓ or ½ after yesterday’s $128+ Trim. Looking for $130+ to exit more/all. B/E stop.
Go-To Watchlist
*Feel free to build your own trades off these relative strength leaders*
Relative strength leaders →
AQUA
AEHR
MELI
GE
WYNN, LVS
SBUX
CAH
BA & Airlines — AAL, DAL, UAL
TJX, ULTA, NKE
CAT
AEHR
HCCI
FSLR
XLE — XOM, CVX, COP, BP, EOG, PXD — (Weekly Charts)
Economic Calendar
None.