Updates for Wednesday December 11, 2024

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Updates 10:10 PM ET - Tuesday

CPI report is at 8:30 AM ET Wednesday.   According to Nick Timiraos of WSJ: expect the November CPI to show that core prices rose about the same as in October, up 0.27% to hold the 12-month rate at 3.3% The median forecast has headline CPI rising to 2.7% from 2.6%.

Volatility is still likely to continue rising
On Monday, VVIX gave us the warning that it was getting ready to rise.  Since then VVIX VIX and then VX all started to rise.  

VX (VIX futures) 4-hour chart below shows its MACD is forming rising bottom while VX itself is forming W bottom.  This basing-to-rise pattern usually precedes a volatility spike. 

Don't be surprised though if VX retests support at 14.2 quickly before really rising to  eventually tag the resistance zone 15.4 - 15.8.  We don't think VX will rise higher than that. This is our projection, but we do need confirmation from VIX VX VVIX MACD patterns (4-hour charts) to ensure that volatility is done rising.

NQ
The anticipated dip for NQ started on Monday this week.  On Tuesday, NQ spiked a little early in the day and then proceeded to continue the dip.  Don't be surprised though if NQ retests the resistance zone 21600 - 21607 quickly before resuming the dip.

​NQ initial support zone is  21165 - 21250.  If NQ finds enough buyers here, a new bull swing can start at this zone, and NQ will retest R1 at 21700 again.  It may rise as high as R2 at 22000 by year end.

Note that a new bull swing has to be confirmed by MACD patterns.  A dip into the support zone does not automatically launch the bull swing.

TQQQ
Like NQ, dip has started for TQQQ.  It may tag the zone 86 - 87 quickly before resuming the dipI.  TQQQ initial support zone is  81.5 - 82.8.  If TQQQ finds enough buyers here, a new bull swing can start at this zone, and TQQQ will retest R1 at 88 again.  It may rise as high as R2 at 91 by year end.

SOXL 
Dip has been progressing for SOXL since Dec 4.  We had projected that a new bull swing can start in the support zone of 26.8 -27.4, and on Tuesday SOXL bounced at 26.56, forming promising bottoming candles on its hourly chart.   

Like TQQQ and NQ, SOXL may spike quickly to tag 28.7 again .  But there is no indication yet from its MACD (1-hour and 4-hour charts) that it is truly bottoming.  So SOXL is likely to resume its drop.  

The support zone may drop to 25.59 - 26.  If SOXL finds enough buyers here, it may rise as high as R2 at 32 by year end.

TNA
​Dip has been progressing for TNA since Nov 27.  TNA may quickly spike up to tag 53.5 again.  But there is no indication yet from its MACD (1-hour and 4-hour charts) that it is truly bottoming.  So TNA is likely to resume its drop.    

​A new bull swing can start in the support zone of 49 - 49.7.   If TNA finds enough buyers here, it can retest R1 at 58 again, and may rise as high as R2 at 63 by year end.

Our personal trade plan
It is not easy to trade dips between bull swings within a bull cycle.  They don't typically drop low enough or last long enough for us to scale in and hold for a bit.  Furthermore, with CPI Wednesday and PPI Thursday, the risk/reward ratio is not great.  Hence our reluctance to jump into SQQQ. 

We plan to wait for NQ TQQQ to be done with the dip and possibly scale in a large position for the Santa rally.

Click here for Signal Spreadsheet.
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Disclaimer
The information presented here is our own personal opinion. Consider it as food for thought.  We are not offering financial advice. We are not promoting any financial products. We are not registered financial advisers or licensed brokers. We make no guarantee that anything will unfold according to our projections.  You are proceeding at your own risk if you follow our trades.