10/25 Trading Plan - Tuesday Recap and Day Ahead

Recap

Yesterday, ES broke its 5-day red streak, the longest in 2023. The green day was expected as ES tested its primary bull market trendline from the 2020 COVID lows and put in a failed breakdown bottoming setup of last week's lows. This setup led me to go long on Sunday/Monday from 4215, adding to it at Monday's close at 4245. The market action played out as expected, with ES holding 4245 overnight and rallying to 4270s this morning.

The Markets Overnight

🌏 Asia: Up
🌍 Europe: Near unchanged
🌎 US Index Futures: Down
🛢 Crude Oil: Up slightly
💵 Dollar: Up slightly
🧐 Yields: Up
🔮 Crypto: Up

Major Global Catalysts

• More stimulus rolled out to boost China’s economy.

Snapshot

Daily

4-Hour

Key Structures

Some notable structures/levels from highest to lowest include 4335-40, 4302-4297, 4275, 4245-50, 4220, and 4205.

Support Levels

4268 (major), 4254, 4245-50 (major), 4238, 4237, 4220 (major), 4213, 4205 (major), 4196, 4185-90 (major), 4172, 4163 (major), 4153, 4144, 4126 (major), 4108, 4101, 4090-95 (major), 4076 (major), 4062, 4055, 4045-50 (major).

Resistance Levels

4275 (major), 4280, 4297-4302 (major), 4308, 4314, 4322-25 (major), 4335-40 (major), 4347, 4355, 4366-70 (major), 4376, 4386 (major), 4395, 4402, 4408 (major), 4418, 4424 (major), 4436-39, 4449, 4460 (major).

Trading Plan

The bull case remains unchanged. As long as ES remains above 4245, the 4245-75 zone is considered a consolidation zone to set up a run to 4300ish, then onto 4322, 4335-40. For the bear case, 4245 needs to fail. If 4245 fails, we retest 4220.

Wrap Up

In summary, while tech earnings after hours yesterday could introduce trappy volatility, the general lean remains unchanged. As long as 4245 continues holding (and ideally for bulls now, 4268), we can push back to 4297-4300, perhaps dip, then onto 4322, 4335-40. If 4245 fails, we retest 4220. This level must hold for bulls.

Disclosure: This is not financial advice and is for informational purposes only. Please consult a professional financial advisor before making any investment decision.