Trading Plan for Friday, May 17th 2024

Trading Plan for Friday, May 17th, 2024

Market Sentiment: Uncertain, as the market shows signs of fatigue after 10 consecutive green days. Traders are anticipating a pullback and adjusting strategies accordingly.

Important Note: It's OPEX Friday, which often leads to choppy price action and pinning (price moving a lot but ending near the starting point). Exercise caution and be prepared for potential traps.

Key Supports

• Immediate Supports: 5309-11 (major), 5294 (major)

• Major Supports: 5271 (major), 5249 (major), 5217-20 (major)

Key Resistances

• Near-term Resistance: 5329-31 (major), 5342 (major), 5361 (major)

• Major Resistances: 5398-5400 (major), 5433-36 (major)

Trading Strategy

• Post-Rally Caution: The market is overdue for a correction after the recent parabolic move. Prioritize protecting profits and consider reducing exposure.

• Long Opportunities: Look for failed breakdowns at 5309-11, followed by a reclaim above 5314, as a potential long entry point.

• Short Opportunities: As always, avoid shorting green candles and breaking trends. If considering shorts, look for a test and bounce/failed breakdown at 5309-11, then consider shorting at 5306 for a move down the levels, exiting all runners at 5294. Proceed with extreme caution as shorting in an uptrend is risky.

• Level-to-Level Focus: The breakout from the downtrend channel has created a volatile environment. Trade the provided support and resistance levels rigorously and take profits aggressively.

Bull Case

• Holding Support: Defending 5309-11 is crucial for maintaining short-term bullish momentum. A hold here would allow for further base-building and potentially another leg up to 5330, 5342.

Bear Case

• Breakdown Signals: A convincing break below 5309-11 triggers a more significant dip. Consider shorting at 5306 after a bounce/failed breakdown confirmation, with level-to-level profit-taking.

News: Top Stories for May 17th, 2024

🌍 Eurozone Financial Stability Risks: The European Central Bank has issued warnings regarding the fragility of financial stability in the Eurozone amidst ongoing geopolitical tensions and policy uncertainties during a significant election year.

💼 U.S. Defense Spending Surge: Recent U.S. military budget allocations have reached new heights, with significant implications for global military and defense strategies.

💰 China's Treasury Sell-Off: In a notable shift in financial strategy, China has reduced its holdings of U.S. Treasury and agency bonds, marking a record sell-off that underscores evolving trade and economic relations.

📉 Federal Reserve's Interest Rate Strategy: The Federal Reserve signals a cautious approach towards interest rate adjustments, reflecting ongoing concerns about inflation and economic recovery.

📈 Global Trade Dynamics: A significant rebound in global trade is anticipated, driven by easing inflation and robust economic activities in key regions, promising a shift in international trade flows and economic recovery.