Trends going into 7/11/2022 and Data to Watch
The 1-Hour Trend Flipped from it's previous Uptrend to a downtrend overnight. That prior uptrend definitely served its purpose and it was only a matter of time.
With that said, we are beginning to see that low volume and relatively weak up push of last week finally fade out and that bearish double top begin to show it is coming to bring direction to the market. Don't expect a sudden plummet quite yet though, as we have 3 decent timeframe trends all circling the wagons and ready to show they aren't over yet. This is evident as the 1-Hour Downtrend signaled, it touched the 4-Hour Uptrend level and immediately got pushed back. As of writing this the 1-Hour has failed to close below it's signal level.
The 2-Hour, 3-Hour, and 4-Hour Uptrends are within a 4 point range. I'd expect some decent resistant getting through and staying through all 3 of those. HOWEVER, if we do push lower, look for the candlesticks to CLOSE below the respective timeframe trends signal area. If price is able to push below those numbers, there is no uptrend signal left to stop a further move to the downside unless a small push upward flips the 30m Downtrend to and Uptrend signal. However, that 30m downtrend signal is relatively fresh and it would take a nice size dip down and then big movement up to create that. Any chance for this price moving further up is going to first require a 6-hour candlestick to close above 3896, and then a real push up is going to need a 12-Hour candlestick to close above 3927. The upward price action definitely seems to have fizzled out around the 6-Hour Uptrend signal, at least for now.
So, overview, Downtrends as of the morning of 7/11/2022 are;
D, W, 30m, 1-Hour
Uptrends are;
12h, 6h, 4h, 3h, 2h
Price seems to be stuck between the 6-Hour Uptrend of 3896, and the 1-Hour Downtrend of 3868, using the 30m level as a support and resistance line as it passes through and closes on either side.
As for Economic Data;
So, without a doubt CPI data will be huge this week as we find out about inflation. However, in checking into earnings reports for the week, Earnings season is clearly ramping up with 16 companies reporting. Of most importance, Pepsi has a BTO Earnings on the 12th, JP Morgan and Morgan Stanley have BTO Earnings on the 14th, United Health and Wells Fargo have reports BTO on 15th. These earnings may end up causing a bigger fluctuation in price action than the CPI. While inflation is important, expected earnings is really what makes investors (outside of Day & Swing Traders) purchase individual stocks.
There is some belief that forecasters are aware that companies will miss on earnings forecasts, but that they don't want to adjust it now, because it will create a tumble down the hill. If they update it this close to Earnings, then investors will lose confidence, those companies will appear to be failing, and consumers will ultimately feel less confident with their respective services, thus causing additional missed earnings, then still missing earnings forecasts, and causing a second dip in valuation. Many investors are going to be watching to see if a lot of companies come up short, and if they do, they will lose confidence in other companies within the same sectors, if not earnings in general because it may begin to prove the theory of incorrect earnings forecasts correct.
That may be the catalyst that drives us to new lows, and then I'd expect the market to begin to price in a possible inflation or at least low expectations until September.
So overall, I'd expect some whipsaw movement today between the 6-Hour and 1-Hour marks to start the week, though I think we are likely to see things go slightly lower. Overall, there is some belief that price could go up close to 4000 before a plummet, so those pending bears are still looking for long positions as bulls until then. The beauty of trading off trends is you don't have to predict the market, you get to react to the market.
Overall, my sentiment is remaining bearish, and I'd estimate a 65% we end lower today by EOD.
Remember always, your risk management plan is the most important part of your trading strategy!
Disclaimer - This is not Official Investment or Financial Advice
With that said, we are beginning to see that low volume and relatively weak up push of last week finally fade out and that bearish double top begin to show it is coming to bring direction to the market. Don't expect a sudden plummet quite yet though, as we have 3 decent timeframe trends all circling the wagons and ready to show they aren't over yet. This is evident as the 1-Hour Downtrend signaled, it touched the 4-Hour Uptrend level and immediately got pushed back. As of writing this the 1-Hour has failed to close below it's signal level.
The 2-Hour, 3-Hour, and 4-Hour Uptrends are within a 4 point range. I'd expect some decent resistant getting through and staying through all 3 of those. HOWEVER, if we do push lower, look for the candlesticks to CLOSE below the respective timeframe trends signal area. If price is able to push below those numbers, there is no uptrend signal left to stop a further move to the downside unless a small push upward flips the 30m Downtrend to and Uptrend signal. However, that 30m downtrend signal is relatively fresh and it would take a nice size dip down and then big movement up to create that. Any chance for this price moving further up is going to first require a 6-hour candlestick to close above 3896, and then a real push up is going to need a 12-Hour candlestick to close above 3927. The upward price action definitely seems to have fizzled out around the 6-Hour Uptrend signal, at least for now.
So, overview, Downtrends as of the morning of 7/11/2022 are;
D, W, 30m, 1-Hour
Uptrends are;
12h, 6h, 4h, 3h, 2h
Price seems to be stuck between the 6-Hour Uptrend of 3896, and the 1-Hour Downtrend of 3868, using the 30m level as a support and resistance line as it passes through and closes on either side.
As for Economic Data;
So, without a doubt CPI data will be huge this week as we find out about inflation. However, in checking into earnings reports for the week, Earnings season is clearly ramping up with 16 companies reporting. Of most importance, Pepsi has a BTO Earnings on the 12th, JP Morgan and Morgan Stanley have BTO Earnings on the 14th, United Health and Wells Fargo have reports BTO on 15th. These earnings may end up causing a bigger fluctuation in price action than the CPI. While inflation is important, expected earnings is really what makes investors (outside of Day & Swing Traders) purchase individual stocks.
There is some belief that forecasters are aware that companies will miss on earnings forecasts, but that they don't want to adjust it now, because it will create a tumble down the hill. If they update it this close to Earnings, then investors will lose confidence, those companies will appear to be failing, and consumers will ultimately feel less confident with their respective services, thus causing additional missed earnings, then still missing earnings forecasts, and causing a second dip in valuation. Many investors are going to be watching to see if a lot of companies come up short, and if they do, they will lose confidence in other companies within the same sectors, if not earnings in general because it may begin to prove the theory of incorrect earnings forecasts correct.
That may be the catalyst that drives us to new lows, and then I'd expect the market to begin to price in a possible inflation or at least low expectations until September.
So overall, I'd expect some whipsaw movement today between the 6-Hour and 1-Hour marks to start the week, though I think we are likely to see things go slightly lower. Overall, there is some belief that price could go up close to 4000 before a plummet, so those pending bears are still looking for long positions as bulls until then. The beauty of trading off trends is you don't have to predict the market, you get to react to the market.
Overall, my sentiment is remaining bearish, and I'd estimate a 65% we end lower today by EOD.
Remember always, your risk management plan is the most important part of your trading strategy!
Disclaimer - This is not Official Investment or Financial Advice
Trade active:
I'm short at 3880 (just as it approached the 30m downtrend again).
I've got a nice take profit target stop already, seeing if it will go lower. Is this the start of the big drop?
It's a bit late for my thoughts last week, but a bit early for this week, heh... but I can't complain as I'm sitting in a good spot if it is.
I've got a nice take profit target stop already, seeing if it will go lower. Is this the start of the big drop?
It's a bit late for my thoughts last week, but a bit early for this week, heh... but I can't complain as I'm sitting in a good spot if it is.
Comment:
The opening volume was strong to this down movement, look for continuing commitment on additional moves in terms of volume in comparison to lower volume days (such as last week).
Comment:
The first trend that we could see failing here is the 3-Hour Uptrend. It ends at 10am, and would need to close below 3863
Otherwise I'm looking for the 2-Hour Downtrend to signal if the move down is big enough.
Otherwise I'm looking for the 2-Hour Downtrend to signal if the move down is big enough.
Comment:
So, definitely a battle there, but it did close below that 3-Hour Uptrend. I also saw the 2-Hour Downtrend beginning to flash, if it goes down from here, that will trigger if it can get and stay below around 3852ish. That closes at 11:00 EST
Trade closed manually:
With the second attempt to push lower faltering, I've taken profit at 3860. Not a bad start to a Monday. Be interested to see where we are come 11am, likely sit out until then.
Comment:
Closed below the 2-Hour Uptrend Signal for the 2 Hour. Certainly a battle over that spot. However, it didn't push the few extra points to hit a downtrend signal and keep it. So... I could see it hovering around that 2-Hour mark, with a 5-10 point up or down until it makes a decision. I think I'll hold off for now, unless there's a really nice entry point. I actually clicked to get in at 3867, but before it went through it had dropped already and I didn't like the risk on the exit point by taking a lower entry point.
Rather wait and see, patience normally pays off and paints a clearer picture.
Rather wait and see, patience normally pays off and paints a clearer picture.
Comment:
All is quiet on the price point front, for now. Looks like the 4-Hour closed DEAD smack on top of itself. I got into two more short positions over the last hour, but neither ended up going much past lunch money. The 1-Hour Dowtrend has held with some significant strength though.
Definitely if there is any return towards the 30m downtrend signal, I'd consider another short. The 1-Hour I'd like to see how it approaches as it passes through.
Definitely if there is any return towards the 30m downtrend signal, I'd consider another short. The 1-Hour I'd like to see how it approaches as it passes through.
Trade active:
Went short, 3880
Comment:
Little concerned to see the 30m manage to close above its trend signal. If this hovers and closes above again, I may just close the trade. I wouldn't say that was a high volume move to recover most of the downward momentum of the day, but it was decent for that time of day and I have some concerns if it stays up near the 30m it could try to revisit the 6-Hour mark again.
Trade closed manually:
Without any momentum, I closed my trade after it bounced off the 4-Hour uptrend at 3869. 11 points of profit. Not sure I'm going to put in on any other positions today
Comment:
Well... it does look like I may have jumped out a bit too early. Though if it stalls out here I only missed out on 15 or so points. Still, such is life I suppose.
The 2-Hour Downtrend is still struggling to form, but it gets increasingly closer and with that pullback, there is a lot of room for it to continue if it moves on. I'll likely continue watching that trend overnight, as well as a pullback above the 3/4 Hour Trends for any last ditched effort to push back up.
I really think the first set of Earnings tomorrow morning is going to set the mood going into CPI and additional Earnings on Wednesday. I'd keep a close eye on PepsiCo
The 2-Hour Downtrend is still struggling to form, but it gets increasingly closer and with that pullback, there is a lot of room for it to continue if it moves on. I'll likely continue watching that trend overnight, as well as a pullback above the 3/4 Hour Trends for any last ditched effort to push back up.
I really think the first set of Earnings tomorrow morning is going to set the mood going into CPI and additional Earnings on Wednesday. I'd keep a close eye on PepsiCo
Comment:
Just one last comment on today. The volume wasn't of epic amounts, that's for sure. Slightly higher than yesterday, and certainly higher than the last big push up, but it does seem like most are sitting on the sidelines this past week.
Today's movement is either the beginning of a downtrend, or the cooling off of the uptrend so that it can give it another go upward.
Today's movement is either the beginning of a downtrend, or the cooling off of the uptrend so that it can give it another go upward.