11/12 Trading Plan - Thursday Recap and Day Ahead

Recap

After an incredible eight-day green streak for ES, we saw a shift on Wednesday as the consolidation range finally broke down, triggering shorts. This was the first real pullback since October 27th, marking the first red day after eight green ones. This week's price action has normalized, and we've settled back into more typical price action, with the 85/15 ratio generally holding before an afternoon trend to the downside yesterday.

The Markets Overnight

• “We are not confident we've achieved a sufficiently restrictive stance. If it becomes appropriate to tighten policy further, we will not hesitate.” Jay Powell in a prepared statement for yesterday’s global economy panel discussion.

• Some US Treasury market settlements were affected by ransomware attacks.

Major Global Catalysts

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

Snapshot

Daily

4-Hour

Key Structures

The core structures/big zones to engage include 4425, 4399, 4376, 4336-26, 4279-83, and 4254-58. These are not comprehensive and are simply some select major structures to take note of.

REMINDER: The market has reached an important juncture, as the SPX has rallied back above its 200-day moving average and reclaimed the long-term secular bull market uptrend line that extends back to the 2020 Covid crash lows. Breaking back above these key long-term technical levels suggests the recent correction may be over, and the primary bull market may be resuming. The ability to hold these levels on a closing basis today would be an encouraging technical development and increase the probability that the October lows marked the end of the pullback.

Support Levels

4356, 4347, 4327-35 (major), 4314, 4306-4302 (major), 4290, 4280-83 (major), 4268, 4255-58 (major), 4242 (major), 4231, 4221, 4214 (major).

Resistance Levels

4366, 4377 (major), 4386, 4399 (major), 4412, 4418-25 (major), 4430, 4439, 4445, 4452, 4462-65 (major), 4477, 4483 (major), 4496 (major), 4507, 4514 (major), 4525, 4530-33 (major), 4542 (major).

Trading Plan

The general lean is that we can defend 4377, head down to 4336-27, and then bounce. If 4377 reclaims, that is probably it for this pullback. Any bear case mentioned here is purely short-term. Generally, though, the bear case is in play as long as we are below 4377ish. As long as it is below it/as long as it holds on any backtest, ES likely dips to 4335-27.

Wrap Up

It's the first red day after eight green days, but bulls remain firmly in control, and the RSI suggests energy for a squeeze with the right trigger. If 4377 reclaims, that is probably it for this pullback. As always, the solution to trading the above action is reactive level-to-level trading.

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