12/28 Trading Plan - Wednesday Recap and Thursday Trading Plan

📊 Market Sentiment: Bullish Santa Rally Continues

The market remains steady as the traditional "Santa Rally" lifts spirits and prices. Bulls are in firm control with the critical support at 4808 serving as the line in the sand.

📝 Recap: Steady Above Support 

The market has been resilient, notably maintaining above the 4822 level. A late-day failed breakdown near the 4824 mark underscores the strength at these levels. Eyes are now closely watching the 4816 and 4808-06 supports, whose failure might trigger more pronounced selling.

🌜 The Markets Overnight

Currently, the market is testing the 4834-36 resistance zone. Bullish continuation could see overnight consolidation below this level, potentially offering opportunities for upward continuation.

🌏 Major Global Catalysts

1. Global Market Movements:

• US Treasuries rallied, with the 10-year yield dropping to 3.79%.

• S&P 500 inched up, approaching its record close from January 2022.

• Hang Seng Index rebounded, driven by online and mobile gaming stocks and EV stocks.

• USDJPY extended losses amid falling US Treasury yields and Japan's stronger-than-expected retail sales and industrial production.

• Crude oil retreated, but copper and gold experienced gains.

2. Central Bank Actions and Inflation:

• Central banks globally have increased interest rates throughout 2022 and 2023 to combat inflation while trying to maintain growth.

3. China's Market Rally:

• Chinese stocks rallied towards the year-end, with the CSI 300 Index gaining significantly as foreign investors bought onshore equities.

4. Economic Predictions for 2024:

• Financial experts are considering the implications of continued high interest rates and the potential for a soft landing of the economy.

5. Stock Market Performance:

• The Russell 2000 is on track for a significant two-month gain.

• Stocks are heading for gains at the end of the trading week, month, quarter, and year.

6. Financial Scandals:

• The financial sector faced numerous scandals, including the collapse of Credit Suisse and the failure of Silicon Valley Bank (SVB).

7. Cryptocurrency Developments:

• Bitcoin advances as optimism builds about ETF approval by the SEC.

• Cathie Wood's investment firm goes big into ProShares Bitcoin and dumps Grayscale.

8. Technology and AI:

• New York Times sues Microsoft and OpenAI for copyright infringement.

• Apple's iPhone design chief joins efforts to work on AI devices.

9. Economic Forecasts and Concerns:

• There are concerns about a potential stock market crash amid quiet trading.

• Investors are advised to watch for data related to inflation, earnings, and unemployment.

10. Geopolitical and Economic Challenges:

• The global economy faces challenges from geopolitical shocks, tight labor markets, and the impact of AI on jobs.

11. Outrageous Predictions for 2024:

• With oil at $150, Saudis buy Champions League franchise.

• A major health crisis hits as obesity drugs make people stop exercising.

• Robert F. Kennedy Jr wins the 2024 US presidential election.

12. Other Notable News:

• The New York Times sues Microsoft and OpenAI in a copyright case.

• The Bank of Japan may abandon yield curve control due to Japan's GDP growth.

• The EU introduces a wealth tax, impacting luxury demand.

📷 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:

• Major Supports: 4822, 4816, 4808-06, 4795, 4788, 4778-4781, 4771-69, 4756-61, 4747, 4744, 4733-35, 4717-22, 4709-05, 4698, 4687, 4683, 4675-78, 4658-61, and 4642.

📈 Resistance Levels

Major Resistance Levels:

• Major Resistances: 4834-36, 4843, 4854, 4860, 4874, 4880, 4890, 4899, 4906-08, 4914, 4925-30, 4845, 4953, 4963, 4976, 4990, and 5005.

📝 Trading Plan

Bull Case Analysis:

Current Sentiment: The market is showing signs of continued bullish momentum, with a current focus on maintaining above the key support levels.

Key Strategy: Emphasis is placed on defending important support zones, particularly around 4808-06, which if held, could lead to a continued upward trajectory.

Upside Targets: If the market sustains above these supports, we could see a move towards higher resistances at 4834-36 and upwards to 4843 and 4854.

Risk Consideration: Given the low volume nature of the week, abrupt moves could occur, necessitating a flexible and responsive approach to trading.

Bear Case Analysis:

Market Vulnerability: The market remains in a bullish stance until a crucial support at 4808-06 is decisively broken, potentially leading to a rapid shift in sentiment and increased selling pressure.

Critical Levels: Watch for 4808-06 as the immediate line that, if breached, would significantly alter the bullish narrative.

Short Entry Points: Any breakdown below these levels should be approached with caution, understanding the nature of high-risk breakdown trades.

Downside Targets: A breach of support could lead to testing of subsequent lower levels, demanding vigilance and quick adaptation from traders.

Overall Outlook:

Bullish Trend Continuation: The market's continued resilience above support levels like 4808-06 and 4816 augurs well for the bullish case, yet the need for vigilance remains paramount.

Key Levels to Watch: The focus remains on how the market respects the 4808-06 and 4816 supports, with these levels serving as crucial indicators for the day's sentiment.

Resistance Testing: Reaction to resistance levels, particularly at 4834-36, will provide further clues to the market's strength and potential for continued ascent.

Risk Awareness: The unique nature of holiday trading requires a heightened awareness of potential volatility and unexpected moves.

Strategy Adaptability: Traders are encouraged to maintain a flexible approach, ready to adjust strategies swiftly in response to market changes.

Today’s Outlook:

Market Dynamics: The market's next steps are closely tied to its behavior around the 4808-06 and 4816 levels, with these supports being key to sustaining the current bullish momentum.

Profit Strategy: A level-to-level trading approach is recommended, focusing on capitalizing on movements from these key support levels upwards while being prepared for any necessary shifts in strategy.

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