*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! After an eventful FOMC week the markets find themselves nearing another ‘key area’. The reaction (or lack thereof) over the coming weeks could very well set the tone for the remainder of the year, thus demanding a high level of focus from us as traders. While this week is a comparatively light news week, be aware of Powell speaking Tuesday at noon EST and unemployment data during Thursday’s pre-market session.
HTF Context:
- Purely from a supply/demand view, we can see that bulls are still facing an uphill battle despite their recent strength. Both indices are facing supply with major demand still waiting far lower. While of course this situation could change over time, the bears currently hold the edge from this perspective.
- The HTF wave context also remains bearish. The moves from the 2022 lows are corrective in structure suggesting at least another leg down. As always, I am not making a time prediction in these charts, but I wouldn’t be shocked to see a relatively violent move down towards HTF demand this year.
Mid-Term Outlook:
- My mid term outlook remains “semi-cautious and ready to become extremely cautious”. I am looking for this current pullback to lead to another high, at which point I will be on high alert for a reversal structure to develop. As you all know (assuming you’ve watched the video linked at the beginning of every newsletter), “high alert for a bearish reversal” does not mean I will blindly dive into a massive short position. If/when price reaches the areas outlines I will simply shift my focus towards a potential trend reversal and become much more conservative in any long opportunities.
Trend Analysis:
- Price is currently in a low and mid term uptrend within the context of a broader downtrend. This situation essentially handcuffs any swing opportunities… I cannot swing longs against the HTF downtrend, but I also can’t swing shorts against the mid/low timeframe uptrends. With that said, I must remain focused on intraday opportunities while I wait for the expected trend reversal (or perhaps a break of the HTF downtrend).
Short Term Outlook & Game Plan:
- I am starting this week with a bullish bias. The current pullback has been corrective and the LTF trend remains up. I will be watching for a reversal to develop for a trip back to the highs before shifting into caution-mode. My first area of interest will be just below Friday’s low, the distal of demand. If there is no reversal structure from this area, my attention will turn towards the fib zones just below. A break under the 0.618 fibs would warrant caution, slicing through 4050/12,050 would signal a more significant trend break.
Swings:
- These four powerhouse stocks remain aligned with the indices as well as each other. This alignment provides confluence for the bear thesis and provides (broad) areas of interest. I will be monitoring the reactions from these zones in conjunction with the indices.