11/15 Trading Plan - Tuesday Recap and Day Ahead

🔄 Recap

In our previous newsletter titled “SPX Is About To Break Out A 4 Month Downtrend”, we anticipated a significant move in the S&P 500 Index Futures (ES). On Monday, ES demonstrated a breakout from its 4-month trendline channel, driven by CPI, resulting in an impressive 100-point surge. This movement aligns with historical trends observed in November 2022.

📈 The Markets Overnight

• 🌏 Asia: Up strongly

• 🌍 Europe: Up

• 🌎 US Index Futures: Up a bit

• 🛢 Crude Oil: Down

• 💵 Dollar: Up a bit

• 🧐 Yields: Up

• 🔮 Crypto: Up strongly

🌏 Major Global Catalysts

• President Biden and President Xi are set to meet today at the Asia-Pacific Economic Cooperation Summit. Their four-hour discussion will cover bilateral and global issues.

• The US House has passed a stop-gap spending bill to fund the government until January 19, preventing a government shutdown. The bill is expected to pass in the Senate.

Snapshot

Daily

4-Hour

🔍 Key Structures

• The ES experienced a breakout from its major downtrend channel that originated in August. This breakout is now the primary focus for potential future movements.

• We observed a bullish “megaphone” pattern formation on Monday, which set the stage for the current surge.

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

• 4484: A crucial support zone, previously acting as resistance.

• 4439-40: A pivotal level, marking the liftoff point for today's CPI-driven movement.

• 4418-25: The breakout point from the downtrend channel and a significant area for dip buying.

📈 Resistance Levels

• 4543: A major resistance level, previously encountered in mid-2023.

• 4517: Trendline resistance connecting recent lows.

• 4596: Though not identified in our latest analysis, this level remains a key watchpoint for potential resistance.

📝 Trading Plan

• Continue monitoring key support and resistance levels.

• Emphasize the importance of holding runners in trading strategies.

• Focus on level-to-level trading, staying alert for breakout points and channel resistances.

🔚 Wrap Up

Today's market movement, especially with CPI as the catalyst, highlights the importance of understanding technical structures like channels and the strategy of holding runners. As we continue to monitor these developments, our approach remains agile, focusing on data-driven insights for informed trading decisions.

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