*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 and happy Friday! At the beginning of this week we had three valid mid-term scenarios and some ambiguity regarding the macro wave-(b) high. Today’s price action eliminated the most bearish path and provided us with a better understanding of the broader situation. While we are starting to get some clarity, remember that markets are still in a complex corrective environment. In conditions such as this we must stay nimble, prioritize discipline and make sure we are waiting for confirmation in our trading. Plenty to discuss today, lets dive in…
Macro Context:
- My macro outlook remains bearish. As I will discuss today, it once again appears that wave-(b) is not yet complete; however, this is a relatively small detail in the bigger picture. I expect the indices to break the 2022 lows, likely before the year’s end.
Trend Analysis:
- The high timeframe trend remains down, the mid-timeframe up… The lower timeframes are a bit more complicated. Price is in a choppy downtrend from the February high, but the micro trend shifted in favor of the bulls with today’s rally. This could change fairly quickly, but is worth monitoring nonetheless.
What Happened This Week?
- The week started with a rejection from supply followed by two days of ugly chop. Price managed to fight through last weeks lows, although in a corrective fashion. The corrective move through the lows did not satisfy the bear count’s requirement for an impulsive 5th wave and instead implied a flat correction was in progress. A turn around today would have kept the bears in control, but not even a hint of a reversal developed. Bulls drove price through the impulsive invalidation, narrowing our list of scenarios down to 2, both with nearly the same outcome.
Mid-Term Outlook:
- With the impulsive bear count now out of consideration, we have confirmation of a corrective structure from the February high. This means that my “one more high” thesis is back in business… Today’s rally took the indices just shy of 12H and 1D supply with corrective structure (expanded flats). It is my expectation that this supply will send price lower to complete a larger X wave, but if buyers manage to fight through supply there are blue skies above. In either case, I expect the February highs to be tested again.
Short Term Outlook & Game Plan
- With price arriving to significant supply I will begin next week on high alert. The burden will be on sellers to produce a reversal structure and take out the demand below. If there is a pullback before reaching supply, the demand below may be used to push price into the zone above. Once price reaches supply, the demand below will be treated as ‘roadblocks’ for the bears to take out rather than areas of interest for longs. My primary focus will be looking for short opportunities if there is a proper trend reversal from supply. If trend remains up through the zones, I will shift my attention to longs back towards the February highs.
*Keep in mind, after today’s expansive move we may see a day or two of chop. Stay patient and wait for a proper price reaction.
Market Movers:
- $AAPL $TSLA and $AMD are all in/arriving to key fib/supply zones. All 3 also appear to need one more local high, just like the indices. If/when new local highs are made I will be on high alert for reversals to set up some epic short opportunities.
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