Trading Plan for Wednesday, April 17, 2024

Trading Plan for Wednesday, April 17th, 2024

Market Sentiment: Uncertain, as investors digest comments from Federal Reserve Chair Jerome Powell and assess their implications on the timing of potential rate cuts.

Key Supports

• Immediate Supports: 5091, 5082 (major), 5076, 5068 (major)

• Major Supports: 5046-51 (major), 5038 (major), 4996-5000 (major)

Key Resistances

• Near-term Resistance: 5097 (major), 5108 (major), 5115, 5126-29 (major), 5155 (major)

• Major Resistances: 5171 (major), 5188-90 (major), 5225-30 (major), 5280-83 (major)

Trading Strategy

• Monitoring Fed Commentary: Stay updated on further statements from Federal Reserve officials as they will influence market direction.

• Range-Bound Trading: The 5082-5115 zone remains a choppy range. Focus on failed breakdowns within this zone, or holding position runners.

• Long Opportunities: Look for bids at 5091 (after multiple successful tests), reclaims of 5082, or failed breakdowns at 5076. Knife-catch protocol applies for any deeper longs, particularly at 5046-51.

• Short Opportunities: Consider shorts if backtesting breakdown zones like 5126-29, 5155, or 5171. Prioritize a failure of 5082 on the short side.

• Profit-Taking: On shorts, consider taking profits entirely at major levels, especially given ES's tendency to short squeeze.

Bull Case

• Reclaims are Key: Bulls need to reclaim breakdown zones, starting with 5126-29, then 5171 to signal a potential short-term bottom.

• Holding Support: A sustained hold of 5082 could lead to a bounce and backtests of the resistances listed above.

• Adding on Strength: Breaks above 5108 after acceptance suggest potential for more upside.

Bear Case

• Breakdown Signals: Bears maintain short-term control until bulls can reclaim key levels discussed above. A failure of 5082 is a warning, with shorts below 5068 targeting 5046-51 (where runners would likely be exited). As always, be wary of traps – look for a bounce/failed breakdown first.

News: Top Stories for April 17th, 2024

Federal Reserve Focus

• Jerome Powell's comments emphasize that inflation remains above the Fed's target, hinting at a delay in interest rate cuts.

• Investor expectations for rate cuts have been adjusted, with a maximum of three cuts now anticipated, starting in June at the earliest.

Market Performance & Sectors

• S&P 500 hits new all-time highs but experiences volatility following Federal Reserve commentary.

• Technology stocks, especially those in the AI sector, continue to outperform.

• Communication services and energy sectors receive a high percentage of analyst buy ratings.

Earnings & Corporate News

• Big banks kick off the earnings season, providing insights into the financial sector's health.

• United Airlines faces aircraft delivery delays and adjusts its strategy.

International Economic & Monetary Policies

• President Biden's proposed tariffs on Chinese steel aim to protect domestic industry.

• ECB plans for near-term rate cuts raise questions about the European economic outlook.

Additional Market Updates

• Cryptocurrency market dynamics, including Bitcoin halving cycles.

• Geopolitical tensions between Israel and Iran and their potential economic implications.

• Chinese economic growth.

• Housing market trends and government tax policies in Canada.

Reminder: The market is reacting to Federal Reserve commentary. Prioritize risk management and adapt your trading strategy accordingly.