Trading Plan for Monday, March 18th, 2024

Trading Plan for Monday, March 18th, 2024

Market Sentiment: Cautious, watching key support levels

Weekly Volatility Risk: High

Supports to Watch:

• Immediate Supports: 5171-73 (major), 5167, 5162, 5152-55 (major), 5147, 5136, 5127 (major), 5115 (major), 5109, 5104, 5092 (major), 5083 (major).

Resistances to Monitor:

• Key Resistances: 5181, 5191, 5202 (major), 5207, 5213 (major), 5220-24 (major), 5230, 5236, 5246-51 (major), 5260, 5267 (major), 5280, 5285, 5294 (major), 5300, 5304 (major), 5315, 5320-22 (major), 5332, 5340, 5345, 5354-57 (major)

Trading Strategy:

• Pivot Point: The 5171-73 support (white trendline) is crucial. A potential bounce is possible, but exercise caution as significant selling pressure could develop if this level fails.

• Long Opportunities: Look for buying opportunities on a bounce or reclaim of 5171-73. The 5152-55 major support is the last line of defense for bulls. Avoid aggressive longs below that level. Look for entries around 5115 or 5127 only if they show strong signs of a rebound.

• Short Opportunities (For experienced traders): Watch for short entries on failed breakdowns or bounces off resistance.

• Knife Catching Caution: Avoid impulsive buys deep into red candles on violent sell-offs. Treat them as short-term, smaller position trades.

Bull Case

• Support Defense: Bulls need to hold the 5171-73 trendline, with ideally no further tests. A bounce here, particularly if it extends to the 5152-55 zone, provides a low-risk entry for a move back towards resistance at 5202/5207.

• Building a Base: Overnight basing below 5191 and above the 5170s support suggests potential upside for a move to 5202/5207.

• Path to New Highs: A successful defense of the trendline and subsequent move through resistance zones could lead to fresh all-time highs.

Bear Case

• Breakdown Signals: Breakdown below 5171 could trigger significant selling pressure. Watch for shorting opportunities on failed breakdowns or bounces. Exercise patience here as breakdowns are often tricky and require skilled execution.

• Cascading Sell-off: If the 5152-55 major support fails, a deeper, more severe correction is possible.

News: Top Stories for March 18th, 2024

• Taiwan's Defense Strategy: Taiwan weighs investing in smaller, cheaper weaponry to counter potential invasion threats from China.

• Goldman Sachs Departure: The exit of a senior executive at Goldman Sachs signals potential internal shifts within the company.

• Middle East Conflict: Israel's raid on a hospital in Gaza risks escalating tensions in the region.

• Retail Challenges: Joann's bankruptcy highlights the ongoing difficulties faced by traditional retailers in the current consumer landscape.

• European Defense Stocks: The value of European defense stocks is fluctuating based on political rhetoric and policy shifts.

• FedEx-Amazon Partnership: Possible collaboration under discussion could reshape logistics and e-commerce dynamics.

• Fed Policy Outlook: The Federal Reserve's latest report highlights potential vulnerabilities due to leverage and high stock valuations. No rate cuts are expected until the Fed is confident inflation is under control.

• Bank Regulation Debate: A year after financial instability, regulators prepare new rules while facing industry criticism.

• Labor Market Update: Continued strength in the US job market puts factors into play the Fed will consider in its interest rate decisions.

• Inflation and Consumer Spending: The paradox of resilient consumer spending despite high inflation is a key focus of economists and policymakers.

• Additional Factors: Keep an eye on Nvidia's GTC Conference, updates on Indian markets, scrutiny of Adani Group, and shifts in startup financing trends.

Remember: Prioritize capital preservation during this time of uncertainty. Be prepared for potential volatility and adapt your trading strategy accordingly.