9/29 Daily Recap, Outlook, and Trading Plan
Recap
The action since Wednesday was further evidence of just how powerful simple technical analysis can be. Bulls put in a hammer daily candle right at 1 year old trendline support, showing the power of the bull market trendline connecting the October 2022 lows, with the March 2023 lows. This trendline was tested on Wednesday and resulted in a large bullish daily hammer candle at support, followed by a continued upward trend on Thursday.
The Markets Overnight
🌏 Asia: Up, Hong Kong up very strongly, mainland China close for a week
🌍 Europe: Up strongly
🌎 US Index Futures: Up
🛢 Crude Oil: Up
💵 Dollar: Down
🧐 Yields: Down a lot
🔮 Crypto: Up
Major Global Catalysts
Key Structures
The large, multi-month channel in yellow remains the primary pattern. We broke it down Wednesday and went into melt-down. Things are straightforward now and bulls need to reclaim that channel at 4385 now to set a “sustained bottom”. This is far away now, but still worth remembering if we get a sustained, multi-day relief rally.
Support Levels
4335 (major), 4322-25, 4313, 4308 (major), 4297 (major), 4280, 4270, 4260-62 (major), 4250, 4245, 4232-36 (major), 4220, 4212 (major), 4208 (major), 4198, 4190 (major), 4170-75 (major - this is a wider zone), 4156, 4150 (major), 4125 (major).
Resistance Levels
4351 (major), 4366, 4372, 4382 (major), 4385, 4391, 4400-4405(major), 4418, 4424 (major), 4432, 4439 (major), 4446, 4460, 4468 (major), 4476, 4485-90 (major), 4496.
Trading Plan
The bull case would look something like base more then head up the levels to 4372-82, dip there, then push higher to 4k, 4424, then ultimately 4468. The big bear case only begins when 4297 fails. I don’t chase and I very obviously would not short the fail there after a 50-point sell. If we test 4297 though, put in a tradeable bounce, then build a nice base, I’d be short 4289 for a move lower down the levels. It could be a very deep one.
Wrap Up
Bulls put in their latest shot at a relief rally, this time at a very significant, 11 month long support. All other attempts have failed after a day. My general lean is bulls can try a little higher and the bounce is in play as long as 4297 keeps hold. This would look something like base/correct more, then push up the levels to 4366, 4372, 4382, then dip again. Ideally, bulls can hold 4335 or 4322 on any dips today. 4297 fails, we start the next deep leg lower.
Disclosure: This is not financial advice and is for informational purposes only. Please consult a professional financial advisor before making any investment decision
The action since Wednesday was further evidence of just how powerful simple technical analysis can be. Bulls put in a hammer daily candle right at 1 year old trendline support, showing the power of the bull market trendline connecting the October 2022 lows, with the March 2023 lows. This trendline was tested on Wednesday and resulted in a large bullish daily hammer candle at support, followed by a continued upward trend on Thursday.
The Markets Overnight
🌏 Asia: Up, Hong Kong up very strongly, mainland China close for a week
🌍 Europe: Up strongly
🌎 US Index Futures: Up
🛢 Crude Oil: Up
💵 Dollar: Down
🧐 Yields: Down a lot
🔮 Crypto: Up
Major Global Catalysts
- PCE reports comes in lighter than expected.
- US government shutdown looms.
Key Structures
The large, multi-month channel in yellow remains the primary pattern. We broke it down Wednesday and went into melt-down. Things are straightforward now and bulls need to reclaim that channel at 4385 now to set a “sustained bottom”. This is far away now, but still worth remembering if we get a sustained, multi-day relief rally.
Support Levels
4335 (major), 4322-25, 4313, 4308 (major), 4297 (major), 4280, 4270, 4260-62 (major), 4250, 4245, 4232-36 (major), 4220, 4212 (major), 4208 (major), 4198, 4190 (major), 4170-75 (major - this is a wider zone), 4156, 4150 (major), 4125 (major).
Resistance Levels
4351 (major), 4366, 4372, 4382 (major), 4385, 4391, 4400-4405(major), 4418, 4424 (major), 4432, 4439 (major), 4446, 4460, 4468 (major), 4476, 4485-90 (major), 4496.
Trading Plan
The bull case would look something like base more then head up the levels to 4372-82, dip there, then push higher to 4k, 4424, then ultimately 4468. The big bear case only begins when 4297 fails. I don’t chase and I very obviously would not short the fail there after a 50-point sell. If we test 4297 though, put in a tradeable bounce, then build a nice base, I’d be short 4289 for a move lower down the levels. It could be a very deep one.
Wrap Up
Bulls put in their latest shot at a relief rally, this time at a very significant, 11 month long support. All other attempts have failed after a day. My general lean is bulls can try a little higher and the bounce is in play as long as 4297 keeps hold. This would look something like base/correct more, then push up the levels to 4366, 4372, 4382, then dip again. Ideally, bulls can hold 4335 or 4322 on any dips today. 4297 fails, we start the next deep leg lower.
Disclosure: This is not financial advice and is for informational purposes only. Please consult a professional financial advisor before making any investment decision
