*disclaimer: Not financial advice. This is my personal trade plan only. I am not qualified or licensed to advise anyone on their specific positions or trades, I am sharing my personal opinions only. Never make financial decisions based on any information on this site or any associated platforms. Always consult a professional for investment related advice and do your due diligence*
Good afternoon! As far as FOMC days have gone this year, today’s was comparatively mild. Markets chopped throughout the morning and sold sharply for about 90pts upon the rate decision of a 50bps hike. After that, price action was fairly contained. There is retail sales data set for release tomorrow morning, but for the time being we’re clear of the major (planned) catalysts. My outlook and plan from yesterday remains intact, but there is still a lot to consider as I navigate price action from this key HTF location.
HTF Context:
- Nothing new on the macro. I still see this as a wave (B) turning into the next and perhaps final leg down in this macro correction.
What Happened Today?
- All in all, the LTF count proposed yesterday played out pretty well… it was just much slower than expected. Looking at this structure we can count an impulse down, albeit with some ugly proportions. Time wise, wave (4) took way longer than the rest of the structure. Typically this would be a red flag, and to an extent it is in this case too; however it’s worth considering WHEN these waves formed and how this effects the proportions… Waves 1-3 formed right after yesterday’s CPI spike and during the cash session open – AKA an extremely volatile window. Wave 4 developed mostly overnight and leading up to a major FOMC meeting – AKA an extremely slow window. With this in mind, I find it reasonable to keep this impulsive count despite the atypical proportions.
Has Anything Changed?
- Today’s action doesn’t change the mid-term outlook or what sellers need to do going forward. For the bears to confirm a change of trend here, they need to find continuation through last week’s lows and print an impulse down into the EOY.
Lower Timeframe Options:
- There are a couple options in the short term – both operating under the thesis that the top is in.
In the “traditional route”, I would expect a choppy and corrective move towards the 0.5-0.786 fibs. In this case I would be watching the distal of 45m supply and the 10m supply zone as major areas of interest.
Considering price has already rejected out of the 30m/45m supply from yesterday, I must consider a more direct path down as well. If things head south from here, I will be looking for an extended (5)th and/or a shallow w2.
In either case, I am primarily focused on short opportunities. Price has formed a reversal structure from a major point of interest meaning this is an extremely high opportunity area for me. I will be monitoring LTF action closely and likely trading the overnight session once again.
What If I’m Wrong?
- Ideally, if I’m going to be wrong the markets will make it fairly clear. If price were to rally with strength and clear the LTF supply zones without any reactions, it would likely mean another high is in order. Another high could still fit into the broader context, but the window is getting smaller on $ES. If price were to close above $4180 on $ES, the macro count would be in jeopardy.
Forex:
- Still no major reversal from the dollar… $EURUSD officially closed above 4D supply, which is worth paying attention to. A close below 4D demand from $DXY could be a red flag to the bears.