10/27 Trading Plan - Thursday Recap and Day Ahead

SPDR S&P 500 FUTURES ESZ2023 & SPY ETF - Market Update

Author

Jonathan
October 27, 2023

Recap

Last week was the longest stretch of consecutive red days in 2023, with the SPX experiencing 5 red days in a row for the first time this year. This week started off with a single green day, representing a 70-point bounce to reset after 5 days. We spent 3/4 of yesterday in sell mode, making it 7 out of the last 8 red days. The question is whether this bounce is another dead cat or the beginning of a sustained recovery leg.

The Markets Overnight

🌏 Asia: Up strongly
🌍 Europe: Mixed
🌎 US Index Futures: Up
🛢 Crude Oil: Up
💵 Dollar: Down slightly
🧐 Yields: Up a bit
🔮 Crypto: Down slightly

Major Global Catalysts

  • Core PCE eases slightly in September

Snapshot

Daily

4-Hour

Key Structures

  • 4279: Connecting the two rising October lows acting as ultimate resistance this week.

  • 4247-50: The key support zone for the last few days collapsed on Wednesday.

  • 4205: Important support zone back in May.

  • 4153: Important support zone in March, April, and May.

Support Levels

4163, 4153 (major), 4147, 4135, 4126 (major), 4112, 4102-4106, 4092 (major), 4083, 4076 (major), 4060, 4048-50 (major), 4040, 4026-29 (major), 4016, 4000-4005 (major).

Resistance Levels

4171 (major), 4185-90 (major), 4205 (major), 4213, 4220-23 (major), 4231, 4248-50 (major), 4259, 4268 (major), 4279 (major).

Trading Plan

The context remains very bearish as long as we are sub 4205. If we can hold 4153, we could see a relief bounce. If 4153 fails, we could see another deep leg lower that should see 4126 at least. For those looking for short reactions, 4220-23 and 4248-50 are the best probability spots to look for a dip.

Wrap Up

With Amazon earnings coming out, we should expect more volatility, and predictability may be difficult. However, if we can defend 4153, we could see a relief bounce with 4171 as a trigger. If 4153 fails, we should expect to continue lower to 4126, 4076.

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