Trading Plan for Monday, May 13th 2024

Trading Plan for Monday, May 13th, 2024

Market Sentiment: Bullish, but extremely overbought and due for a pullback. Traders are advised to exercise extreme caution and prioritize protecting gains over chasing further upside.

Key Supports

• Immediate Supports: 5236 (major), 5225, 5213 (major)

• Major Supports: 5202-04 (major), 5186 (major), 5155 (major), 5112-15 (major)

Key Resistances

• Near-term Resistance: 5246 (major), 5261 (major), 5272 (major), 5303 (major)

• Major Resistances: 5329 (major), 5354 (major), 5398-5400 (major)

Trading Strategy

• Pullback Anticipation: Expect a pullback after 7 consecutive green days. Be prepared for a sudden reversal and adjust your strategy accordingly.

• Long Opportunities: Prioritize failed breakdowns at 5236, then 5213 for long entries. Look for bounces and reclaims, especially if price dips below 5209. Consider deeper longs at major supports (5186, 5155) only if the market shows substantial weakness.

• Short Opportunities: While avoiding shorting green candles and breaking trends is advised, monitor back-tests of 5272 and 5303 for potential short entries. Proceed with extreme caution and be prepared for sharp reversals.

• Consolidation Zone: Focus on the 5236-5261 range as a potential consolidation zone. Monitor the price action closely within this range for clues about the next directional move.

Bull Case

• Holding Support: If 5236 holds, continued consolidation within the 5236-5261 range is likely. This would suggest a pause before a potential breakout toward 5272, 5285-88, and ultimately 5303.

• Ultra Bull Case (Unlikely): ES would need to hold above 5236 and continue building a base overnight for the most bullish scenario. This could trigger a move higher without a significant dip.

Bear Case

• Breakdown Signals: A convincing break below 5236 triggers a dip, targeting 5213 initially, with potential to extend to the 5186-5115 zone. Monitor bounces/failed breakdowns at these levels for potential short entries.

News: Top Stories for May 13th, 2024

1. Corporate Earnings Surge

• Details: A notable rise in Q1 2024 earnings has been reported among S&P 500 companies, with a majority exceeding analysts' expectations.

• Impact: This upsurge signals a strong corporate sector potentially boosting market confidence and influencing stock prices.

2. Central Bank Stances on Interest Rates

• Context: With persistent inflation, central banks, including the Federal Reserve, are cautiously maintaining current interest rates.

• Implications: This strategy aims to control inflation without disrupting economic stability, reflecting a delicate balance in monetary policy.

3. IMF's Global Growth Forecast

• Forecast: The IMF projects a global growth rate of 3% for 2024, with potential long-term economic challenges.

• Significance: This modest growth underscores global economic sluggishness, necessitating strategic economic measures.

4. Geopolitical Tensions and Economic Impact

• Developments: Tensions in the Middle East are intensifying, affecting global markets and commodity prices.

• Consequences: These geopolitical issues are critical for financial stability, influencing both market volatility and investor sentiment.

5. Key Economic Indicators Release

• Upcoming Data: Major economic indicators like consumer price indexes and retail sales are scheduled for release this week.

• Relevance: These indicators are crucial for assessing the economic health of major economies and will influence forthcoming monetary policy decisions.