Trading Plan for Thursday, April 11, 2024

Trading Plan for Thursday, April 11th, 2024

Market Sentiment: Uncertain, as the market continues to digest the hotter-than-expected CPI report and its implications for the Federal Reserve's actions.

Key Supports

• Immediate Supports: 5200, 5191 (major), 5184, 5178, 5171 (major), 5162.

• Major Supports: 5157, 5147, 5123-26 (major), 5103, 5096 (major), 5050-53 (major).

Key Resistances

• Near-term Resistance: 5207, 5212 (major), 5230 (major), 5243-46 (major), 5269 (major).

• Major Resistances: 5287 (major), 5302-04 (major), 5321 (major), 5352 (major), 5392 (major).

Trading Strategy

• Flag Structure in Focus: The red flag pattern established since the March 31st ATH remains crucial, with support at 5191 (ideal hold) or 5184 being key for bulls to defend.

• Long Opportunities: Prioritize 5191 bids, but only after reading reactions for signs of defense (ideally, grabs below). A test and reclaim of 5184 could also be a long signal. If 5191 fails, consider longs at 5171 or 5157, especially after failed breakdowns of today's lows.

• Short Opportunities: If a rally occurs, potential backtests of breakdown levels like 5243-46 and 5269 could be shorting areas. Exercise extreme caution with counter-trend shorts in these conditions.

• Chop Zone Caution: The 5191-5212 zone is currently considered high-risk for overtrading.

Bull Case

• Support Holds: Bulls need to defend 5191 or at least 5184 to maintain control. Spikes below 5184 with rapid reclaims could signal buying strength.

• Backtesting Breakdowns: A strong rally could lead to retests of today's breakdown levels of 5230 and 5243-46. A push to flag resistance at 5269 is possible, triggering a breakout.

• Adding on Strength: In this choppy environment, it's difficult to identify reliable adding points. Consider 5207 reclaims with acceptance above.

Bear Case

• Breakdown Signals: A failure of 5191 opens the door for a deeper downside move. As with ALL breakdowns, be wary of traps – look for a bounce/failed breakdown first, then consider shorts at 5188 (ideally within a trendline structure). Target 5157 on this move, with level-to-level profit-taking.

News: Top Stories for April 11th, 2024

Interest Rates & Inflation

• Market adjusts to potential year without Fed rate cuts.

• Larry Summers suggests the Fed might raise rates further.

• Hotter CPI boosts the US dollar to a 5-month high.

Oil, China & Global Markets

• Oil prices on the rise, Bank of America predicts potential $100 per barrel.

• China's inflation slows, while US inflation exceeds expectations.

• Swiss government proposes tighter bank regulation; concerns remain.

US Labor Market & Stock Performance

• Strong US jobs report for March highlights economic resilience.

• S&P 500 posts strong Q1 gains.

Banking Regulations & Debt Relief

• UBS benefits from less-stringent Swiss banking regulation plans.

• US Treasury calls for action on debt relief for developing countries.

ECB Policy & Corporate Earnings

• ECB moves closer to a rate cut.

• Earnings season focus on big banks and consumer spending.

Reminder: The CPI report has fueled volatility and uncertainty. Prioritize risk management and adapt your trading strategy accordingly!