12/21 Trading Plan - Today's Recap and Friday Trading Plan

📊 Market Sentiment: Muted Santa Rally Expectations

Despite some anticipations of a quieter Santa Rally this year, the market is expected to navigate through a "choppier" holiday season than usual. Flexibility and adaptability in trading strategies are emphasized over predictions.

📝 Recap: Historical Santa Rally Period

Historically, the "Santa Rally" begins with the final trading session before the holidays, typically from December 22nd to January 4th. Over the last 30 years, this period has averaged a seasonal return of +1.4%. Yet, a significant drop-off in market activity is expected during the holidays, potentially leading to lower-quality trading.

🌏 Major Global Catalysts

• The IMF has lowered GDP growth projections for advanced economies to 1.5% in 2023 and 1.4% in 2024, highlighting global economic slowdown concerns, while central banks, including the US Federal Reserve, raise interest rates to address persistent inflation.

• Emerging markets exhibit mixed economic trends, with weakened industrial activity but prospects for a 'Soft Landing' in some countries. China's growth has slowed in Q4, India's GDP outlook is positive for 2024, Brazil considers rate cuts, and Argentina faces peso devaluation issues.

• The US economy remains resilient with robust growth, buoyed by consumer spending and a strong job market, as the Biden-Harris Administration's policies aim to promote real wage growth and a healthy labor market in a context of reducing inflation.

📷 Snapshot

Daily

Daily Data Sentiment Analysis:

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

• Overall Sentiment: Bullish.

4-Hour

4-Hour Data Sentiment Analysis:

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

• Overall Sentiment: Bullish

📉 Support Levels

Major Support Levels:

• 4777-81, 4772, 4745-50, 4732-34, 4705-08, 4685, 4661, 4625-30, 4606, 4591-93

Minor Support Levels:

• 4793, 4788, 4761, 4756, 4737, 4719, 4712, 4698, 4692, 4675, 4666, 4648, 4641, 4616, 4585

📈 Resistance Levels

Major Resistance Levels:

• 4797, 4811, 4830, 4855-60, 4883-86, 4893, 4903-06

Minor Resistance Levels:

• 4816, 4822, 4838, 4845, 4849, 4871, 4876

📝 Trading Plan

• Bull Case Analysis:

  • Current Sentiment: The market retains a strong bullish trend, with the ES (S&P 500 futures) demonstrating resilience.

  • Key Strategy: Concentrate on key support levels, such as 4740-45, for long positions, and avoid chasing the market.

  • Upside Targets: A hold above 4740-45 could lead to a bounce towards 4767 and potentially 4788. A major upward move necessitates reclaiming 4810-12.

  • Risk Consideration: Stay vigilant of market shifts; despite the bullish trend, the recent selling adds complexity.

  Bear Case Analysis:

  • Market Vulnerability: The market is at a critical juncture; losing the 4740 level could indicate a bearish turn.

  • Critical Levels: Monitor the 4740-45 range closely for any bearish signals.

  • Short Entry Points: In case of weakness, consider shorts with a trigger around 4736, while avoiding impulsive trades.

  • Downside Targets: If a bearish trend confirms, look to profit from support levels at 4715 and 4705-08.

  Overall Outlook:

  • Bullish Trend Continuation: The market may continue its bullish trend if 4740-45 sustains.

  • Key Levels to Watch: Focus on critical supports at 4740-45 and resistance levels at 4767 and 4788.

  • Resistance Testing: Monitor whether the market tests and breaks through higher resistance levels.

  • Risk Awareness: Prepare for increased volatility and a bi-directional market movement.

  • Strategy Adaptability: Be ready to adjust strategies based on market responses.

  Tomorrow’s Outlook:

  • Market Dynamics: The focus is on the performance of the 4740-45 level for potential upward movement.

  • Profit Strategy: Aim for level-to-level trading, adapting to both bullish and bearish scenarios.

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