12/14 Trading Plan - Thursday Recap and Day Ahead

📊 Market Sentiment: Bullish

Stay light on OPEX day due to the potential for choppy trading. Look for a potential base building in the 4756-83 range for a potential leg up to the 4804-08 zone. If 4756 fails, prepare for a potential pullback.

📈 The Markets Overnight

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

🌏 Major Global Catalysts

• Markets rally strongly on FOMC Dot Plot forecasting 3 rates cuts totaling up to 0.9% in 2024. 

• European Central Bank and the Bank of England each hold rates steady this morning.

📷 Snapshot

Daily

Daily Data Sentiment Analysis:

• EMA 9, 21, 55: Indicating a bullish sentiment with closing prices comfortably above these EMAs.

• Overall Sentiment: Bullish.

4-Hour

4-Hour Data Sentiment Analysis:

• EMA 9, 21, 55: Also showing a bullish trend.

• Overall Sentiment: Bullish.

📉 Support Levels

• Major:  4772, 4756, 4740-43, 4710-05, 4660-65

• Minor: 4764, 4724-26, 4717, 4700, 4690, 4684, 4678, 4674, 4670

📈 Resistance Levels

• Major: 4780-83, 4804-08, 4845, 4860-63

• Minor: 4787, 4795, 4816-20, 4826, 4838

📝 Trading Plan

• Bull Case Analysis

  Scenario Overview:

  • Recent Trend: ES (S&P 500 futures) has experienced a strong bullish trend, marked by six consecutive green days.

  • Bull Case Premise: Continuation of the uptrend through pattern formation and support maintenance.

  Key Levels and Patterns:

  • Support Zone: 4756, pivotal for bulls to maintain control.

  • Target Range: 4756-4783, seen as a potential consolidation area.

  • Upside Objective: A move towards the 4804-08 zone, acting as a magnet level.

  Strategy and Risks:

  • Pattern Building: Bulls expect ES to form a continuation pattern within the target range, setting the stage for another leg up.

  • Risk of Breakdown: Failure to hold 4756 increases the risk of a backtest towards the 4710-05 area.

  • Execution Caution: Traders should be wary of false breakouts and maintain strict risk management.

• Bear Case Analysis

  Scenario Overview:

  • Bear Case Premise: A break below key support leading to a downward move.

  Key Levels and Patterns:

  • Critical Support: 4756, the level below which breakdown trades become viable.

  • Target Short Entry: Around 4752, following a failed bounce at 4756.

  • Profit Targets: First target at 4740-43, capturing the move below the day's low.

  Strategy and Risks:

  • Breakdown Trades: These are high risk/reward but have a low success rate (60% expected to fail).

  • Execution Skill: Requires skill to execute successfully; not advisable for traders uncomfortable with these odds.

  • Rule of Thumb: Avoid chasing the price; wait for a clear trade setup and reaction at the key level.

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