7/13: Daily Recap, Outlook, and Trading Plan
Recap
In last week's newsletter, we highlighted the rally from 4420 to 4500+ as one of the biggest point moves of 2023. The market had built a classic ascending triangle pattern with 4420 support and 4490ish resistance. This week, the market dipped to 4420 support, ran to triangle resistance at 4490 before the CPI release, and then broke out yesterday, squeezing the market. The breakout led to a multi-week chart pattern, indicating higher targets for the future.
The Markets Overnight
🌏 Asia: Up strongly
🌍 Europe: Up
🌎 US Index Futures: Up
🛢 Crude Oil: Down slightly
💵 Dollar: Down
🧐 Yields: Down
🔮 Crypto: Up
World Headline
Falling inflation spurs global rally.
Key Structures
The major structures to watch include the ascending triangle pattern with 4420 support and 4490ish resistance. We have already seen a breakout from this pattern. The next important structure is the large rising uptrend channel connecting the March lows and May lows. The support is currently at 4350 and resistance at 4575.
Support Levels
4506, 4494, 4479, 4464, 4448-50, 4441, 4432, 4424, 4416, 4400-4405, 4393, 4380-82, 4369, 4345-50, 4337, 4326, 4317, 4305, and 4290
Resistance Levels
4520-25, 4534, 4543-45, 4565, 4570-75, 4585, 4592, 4601-03, 4615, 4635, and 4649
Trading Plan
Today, the bull case is in play above the breakout. If we see any dips, 4479 would be the lowest point for bulls. As long as we are above the ascending triangle breakout, the bull case could see us base between 4493 and 4525 before moving up to 4534, 4545, and then 4570-75. The bear case begins when the breakout fails. The first warning would be the failure of 4493. If we see a bounce here and deep acceptance of the level, 4490 may be a spot to try for the scalp down.
Wrap Up
We have seen a significant breakout and now the market needs to defend this breakout. Although we have rallied straight from 4420 with only tight sideways consolidations, it wouldn't be surprising to see the market build a base between 4520 and 4494. If the market remains strong, we may not even lose 4506. However, if we fall below 4493, we may see a sell-off.
Disclosure: This is not financial advice and is for informational purposes only. Please consult a professional financial advisor before making any investment decisions.
In last week's newsletter, we highlighted the rally from 4420 to 4500+ as one of the biggest point moves of 2023. The market had built a classic ascending triangle pattern with 4420 support and 4490ish resistance. This week, the market dipped to 4420 support, ran to triangle resistance at 4490 before the CPI release, and then broke out yesterday, squeezing the market. The breakout led to a multi-week chart pattern, indicating higher targets for the future.
The Markets Overnight
🌏 Asia: Up strongly
🌍 Europe: Up
🌎 US Index Futures: Up
🛢 Crude Oil: Down slightly
💵 Dollar: Down
🧐 Yields: Down
🔮 Crypto: Up
World Headline
Falling inflation spurs global rally.
Key Structures
The major structures to watch include the ascending triangle pattern with 4420 support and 4490ish resistance. We have already seen a breakout from this pattern. The next important structure is the large rising uptrend channel connecting the March lows and May lows. The support is currently at 4350 and resistance at 4575.
Support Levels
4506, 4494, 4479, 4464, 4448-50, 4441, 4432, 4424, 4416, 4400-4405, 4393, 4380-82, 4369, 4345-50, 4337, 4326, 4317, 4305, and 4290
Resistance Levels
4520-25, 4534, 4543-45, 4565, 4570-75, 4585, 4592, 4601-03, 4615, 4635, and 4649
Trading Plan
Today, the bull case is in play above the breakout. If we see any dips, 4479 would be the lowest point for bulls. As long as we are above the ascending triangle breakout, the bull case could see us base between 4493 and 4525 before moving up to 4534, 4545, and then 4570-75. The bear case begins when the breakout fails. The first warning would be the failure of 4493. If we see a bounce here and deep acceptance of the level, 4490 may be a spot to try for the scalp down.
Wrap Up
We have seen a significant breakout and now the market needs to defend this breakout. Although we have rallied straight from 4420 with only tight sideways consolidations, it wouldn't be surprising to see the market build a base between 4520 and 4494. If the market remains strong, we may not even lose 4506. However, if we fall below 4493, we may see a sell-off.
Disclosure: This is not financial advice and is for informational purposes only. Please consult a professional financial advisor before making any investment decisions.
