Trading Plan for Thursday, May 16th 2024

Trading Plan for Thursday, May 16th, 2024

Market Sentiment: Bullish, but highly extended and statistically due for a significant pullback after 10 consecutive green days. Proceed with extreme caution and prioritize protecting gains.

Key Supports

• Immediate Supports: 5308-10 (major)

• Major Supports: 5272 (major), 5253-56 (major), 5200-02 (major), 5145-50 (major)

Key Resistances

• Near-term Resistance: 5327-31 (major), 5337 (major), 5370-72 (major)

• Major Resistances: 5395-5400 (major), 5430-35 (major)

Trading Strategy

• Extreme Caution: 10 green days in a row is statistically rare, and a deep pullback could occur at any time.

• Long Opportunities: Avoid chasing long entries at current levels. Focus on potential bids at 5308-10 only after a dip and strong reaction (ideally, a failed breakdown of the afternoon low). Consider deeper longs at 5272, 5253-56, or lower majors only on strong confirmations (failed breakdowns of lows, etc.).

• Short Opportunities: While shorting in a strong uptrend is discouraged, those comfortable with counter-trend trades may consider the 5370-72 zone, but only after a bounce/failed breakdown. Proceed with extreme caution.

• Prioritize Preservation: Focus on protecting profits and minimizing risk exposure in this highly uncertain environment. Avoid overtrading and wait for high-probability setups.

Bull Case

• Ultra Bull Case (Unlikely): ES needs to hold above 5308-10 on any dips, with a new base forming between 5308 and 5331. This would be the most bullish scenario, leading to a potential test of 5337, 5348, then 5370-72.

Bear Case

• Breakdown Signals: A convincing break below 5308-10 could trigger a substantial dip. Watch for bounces/failed breakdowns at 5272, 5253-56, and lower major supports for potential long entries if the market rebounds. If 5308-10 fails, consider shorts after a bounce/failed breakdown at 5300.

News: Top Stories for May 16th, 2024

• 📈 S&P 500 Hits All-Time High: Yesterday, the S&P 500 index reached a new all-time high, closing at 5,253 points. This reflects investor confidence and market optimism driven by favorable economic indicators and expectations of accommodative monetary policy from the Federal Reserve.

• 🌐 IMF and World Bank Spring Meetings: The International Monetary Fund (IMF) and the World Bank are preparing for their spring meetings amidst ongoing geopolitical tensions and economic uncertainties. These meetings will address global economic issues, including conflict impacts and strategic economic adjustments.

• 🏦 UN Economic Update: The United Nations will launch the mid-year update of the World Economic Situation and Prospects 2024. This update will assess global economic conditions, highlighting challenges such as high interest rates, debt difficulties, and geopolitical risks.

• 📊 Wall Street Analyst Revisions: Wall Street analysts are revising their forecasts for the S&P 500 due to the market's unexpected strength. This reflects the dynamic nature of market expectations and investor agility in navigating the evolving financial landscape.

• 🌍 Critical Minerals Demand: Global economic discussions are focusing on managing the demand for critical minerals essential for low-carbon technologies. This ties into broader sustainability goals and the economic opportunities and challenges for developing countries.