11/6 Trading Plan - Last Week Recap and Day Ahead

Recap

We witnessed an impressive stock market rally, marking the largest green week since the inception of the current bull market in October 2022, and a record not seen since November 2020. Every trading day experienced significant gains, driven by a strategic short squeeze following a preceding sell-off period.

The Markets Overnight

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

Major Global Catalysts

• Saudi Arabia and Russia reaffirm commitment to oil production cuts. (link) 

• KOSPI exchange index soars 5.6% after South Korea bans short selling until June 2024.

Snapshot

Daily

4-Hour

Key Structures

The pivot began post eight consecutive red days, fueling the rally through a significant buying pressure indicative of a short squeeze—a momentum mirrored only by the market's robust ascent since October 2022.

REMINDER: The market has reached an important juncture, as the SPX has rallied back above its 200-day moving average and also 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. Continued strength as we head into next week would further solidify the case that this bull market still has room to run.

Support Levels

Major support levels: 4378, 4367-65, 4336, 4313, 4290, 4279, 4250-53, 4236, 4213-16, 4184.

Minor support levels: 3929, 4060, 3798, 4453, 3536.

Supports at 4367-65 are pivotal, having been tested last Friday, and now presenting potential weakness.

Resistance Levels

Major resistance levels: 4385, 4398, 4418-24, 4440, 4485-89, 4496, 4508, 4514, 4537-42.

Minor support levels: 4135, 4020, 3906, 4595, 4480

The major resistance zones at 4418-24 could be critical for establishing the market's short-term trajectory.

Trading Plan

The initial support to watch is at 4367-65. A break below could signal a pullback, with 4335-38 as the next critical juncture for potential long positions, reflecting last Friday's breakout point.

Wrap Up

While the market's direction seems to sustain its ascent, caution is paramount given the unpredictable nature of this 'melt-up' phase. Watch for a potential dip to 4335 as a litmus test for the market's strength; a failure here may precipitate a retrace towards 4290. Maintain a reactive stance, ready to adapt to the market's signals.

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