Click here for Signal Trades spreadsheet. Updates 8:51 AM ET - Friday 3/30/23 Key S/R levels US Core PCE Price Index rises 4.6% Y/Y. Last month's number was 4.7%. The consensus estimate was 4.7%. So technically, PCE is not as hot as expected. So far though, ES NQ RTY reacted by setting up to drop, and $VIX is setting up to rise. At 12:30 AM this morning, we wrote: We may see $VIX spikes up post PCE report on Friday at 8:30 AM ET. $VIX may reach 21-22 zone before dropping again. Realistically, we think $VIX may reach 21 and then drops. That's the dip setup we want to see to enter long ES NQ RTY. We may enter TNA instead of SVIX. We will update spreadsheet shortly. Updates 12:30 AM ET - Friday 3/30/23 Key S/R levels The table below is the same as yesterday. ES NQ are have technically breeched resistance at R1 a bit. But we need to see if ES NQ continue to rise above the R1 levels shown below. Our indicators are mostly bullish (green) right now, but the key indicator $VIX is warning that it's likely to spike up quickly. We may see $VIX spikes up post PCE report on Friday at 8:30 AM ET. $VIX may reach 21-22 zone before dropping again. This will be the dip to enter bull position for multi-day holding. Our Personal Trade Plan We have shown in our spreadsheet our plan to scale into SVIX. This is a 3x ETF that is the inverse of $VIX. As $VIX drops, SVIX rises. So it moves in the same direction as ES NQ RTY typically. The ironic thing is that volatility charts are far more predictable right now than ES NQ RTY charts. So this is why we are planning to trade SVIX. Basically, we are looking for $VIX to surge up to retest 21-22 zone quickly, and drops quickly from there. We'll be relying on this quick $VIX spike as the signal to buy the dip in SVIX. You can use the same signal to buy the dip in instruments based on ES NQ RTY. Click here for Signal Trades spreadsheet. 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.
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Click here for Signal Trades spreadsheet. Updates 1:20 AM ET - Thursday 3/30/23 Key S/R levels The table below is the same as yesterday. Our indicators are mostly bullish (green) right now. This means traders should stick to finding low-risk setups for entering multi-day bull positions. There is no low-risk setup right now for multi-day bear positions. $VIX gapped down below 20 on Wednesday and barely budged. In our experience, this type of highly contracted intraday $VIX pattern is usually a precursor to a $VIX spike. What we don't know is how high the spike will be. Rather than guessing the exact level, bulls should use the 20-day EMA blue line as a guide. Whenever $VIX spikes up and tags this line, it's a bullish setup to enter bull positions, and hold them until $VIX gets closer to 17. If $VIX does not spike up to tag the 20-day EMA blue line, and instead drops sharply towards 17, bulls should stay out. This is usually a bull trap, and a cause for bear despair. We will discuss more if this pattern shows up. Our Personal Trade Plan We will resume posting trade plans in Updates for Friday, ahead of PCE report. 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. Click here for Signal Trades spreadsheet. Updates 1:10 AM ET - Wednesday 3/29/23 Key S/R levels The table below is the same as yesterday. Even though macro economic conditions are bleak, most of our indicators above are bullish (green). So betting against this market is likely to be painful. But that does not mean we can just jump in and establish bull positions. Here are some patterns we are observing:
$VIX is right at 20, and it is likely to bounce from this level. We'll be monitoring for $VIX to rise from 20 possibly up to 23. $VIX retest of 23 will be a bullish setup to enter bull positions based on ES NQ RTY, for a multi-day trade. Our Personal Trade Plan We have a number of urgent personal matters to take care of. So we have to be out of the office between Friday March 24 and Thursday March 30. We'll post the nightly analysis as normal, but we won't be able to trade personally so there will not be trade plan updates in the spreadsheet, or intraday updates. Our apologies for any inconvenience. 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. Click here for Signal Trades spreadsheet. Updates 1:50 AM ET - Tuesday 3/28/23 Key S/R levels The table below is the same as yesterday. $VIX is rapidly approaching 20, and it is likely to bounce from this level. We'll be monitoring for $VIX to rise from 20 possibly up to the zone 23-24. $VIX retest of 23-24 will be a bullish setup to enter bull positions based on ES NQ RTY, for a multi-day trade. Our Personal Trade Plan We have a number of urgent personal matters to take care of. So we have to be out of the office between Friday March 24 and Thursday March 30. We'll post the nightly analysis as normal, but we won't be able to trade personally so there will not be trade plan updates in the spreadsheet, or intraday updates. Our apologies for any inconvenience. 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. Click here for Signal Trades spreadsheet. Updates 8:15 PM ET - Sunday Macro economic conditions are becoming bleak again The biggest impact from the banking crisis is this. Banks are going to tighten credit, and that will cool the economy. Combined that with consumers feeling nervous about the economy, or simply unable to get to their money, and the risk of a recession is high. This is likely to happen globally, not just in the US. Read more here. But shorting this market will bring you pain Despite the bleak macro conditions, ES NQ RTY are setting up to rise, at least in the short term. We will explain further below. Upcoming key events The market moving report is likely to be PCE on Friday. This supposedly is the Fed's preferred gauge of inflation. Earnings this week Chart courtesy of Earnings Whispers. Key S/R levels The table below has been updated for ES and NQ. RTY levels are all the same. In the analysis pre-market Friday, we showed you a chart of $VIX forming its 4th lower high top. We discussed how this is a bullish setup for ES NQ RTY. The setup showed up early Friday, and stocks took off the rest of the day. Now more of the indicators have turned bullish, especially market breadth indicators. Our projection is that bullish conditions will remain going into April, unless PCE numbers are extremely hot. The bullish chart pattern to monitor for is this: $VIX continuing to form a series of lower highs similar to what's shown below. As long as $VIX does this, ES NQ RTY will continue to climb. However, bulls should be careful about initiating multi-week bull positions if $VIX appears to just drop like a brick. That is usually a climax before $VIX reverts upward. Bulls can trade bull positions when $VIX drops sharply, but stick to intraday or at most 2-day positions only. The best multi-day or multi-week bull position setup is when $VIX 20 EMA blue line climbs back up to tag or get close to its 200 EMA green line, as shown above. Use $VIX 30-minute chart to monitor for all these setups. Another bullish pattern you can monitor for (for both intraday and multi-day positions) is shown below. On SVXY 30-minute chart, we want to see SVXY forming small hammers at the start of day, below the 20 EMA blue line, which itself should be below 200 EMA green line. This is a very bullish setup for enter bulls positions based on ES NQ RTY, as well as short $VIX ETF such as SVIX or SVXY. Our Personal Trade Plan We have a number of urgent personal matters to take care of. So we have to be out of the office between Friday March 24 and Thursday March 30. We'll post the nightly analysis as normal, but we won't be able to trade personally so there will not be trade plan updates in the spreadsheet, or intraday updates. Our apologies for any inconvenience. 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. Click here for Signal Trades spreadsheet. Updates 2:30 PM ET- Friday 3/24/23 Key S/R levels The levels are the same as yesterday. The signals are basically the same as yesterday. Here is our projection based on our indicators.
The way to confirm that ES NQ RTY are ready resume the bullish rise back to R3 is to monitor $VIX for the formation of the 4th lower-high top as shown below. This may happen on Friday or Monday. Our recommendation is to monitor for this combination setup to enter multi-day bull positions:
Our Personal Trade Plan We have a number of urgent personal matters to take care of. So we have to be out of the office between Friday March 24 and Thursday March 30. We'll post the nightly analysis as normal, but we won't be able to trade personally so there will not be trade plan updates in the spreadsheet, or intraday updates. Our apologies for any inconvenience. 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. Click here for Signal Trades spreadsheet. Updates 1:15 PM ET- Thursday 3/23/23 $VIX basing in the zone 20 - 22 will lead to... $VIX is forming intraday patterns indicating that it is basing in the zone 20-22. If $VIX spends multiple days in this zone, then it will build up enough momentum to rise up to 25-26. While $VIX does this, ES NQ RTY will drop sharply. If $VIX quickly spikes up to 22-23, it's likely ready to start a new down segment below 20. When $VIX resumes the downward momentum, ES NQ RTY will rise earnestly. It's not easy to trade while $VIX is in decision zone as it is right now. Stick with quick intraday trades and wait for $VIX to give us the go ahead to initiate the multi-day positions. Updates 3:13 AM ET- Thursday 3/23/23 "The Fed tightens until something breaks" Read more about this Wall Street old adage and how it applies to the current economy, based on the Fed latest rate raise of 0.25%. According to WSJ, supposedly market was happy with FOMC announcement, but lost steam after Treasury Secretary Janet Yellen said she wasn't considering ways to guarantee all bank deposits at a Senate hearing Wednesday. But as you know, we gave you the alert to wait for the pullback in ES NQ RTY before 2 PM ET. What made us cautious? Read more below. Key S/R levels The levels have been updated to reflect where ES NQ RTY is likely to retest next (S1). In the updates written Tuesday night, the indicators were mostly bullish. But when we reviewed $VIX and $VVIX signal early on Wednesday, they were both forming W bottom on their hourly charts. This told us that $VIX was very likely going to spike some amount, and it was likely to form a 4th lower-high top before dropping for real. This is a typical behavior in a nervous market like the one that we are in right now. The hard part is to figure out how much $VIX will spike to form the 4th lower-high top. Based on the complexity of the W pattern formed by $VIX, we think that $VIX will likely retest the zone 25-26 to form the 4th lower-high top. Our Personal Trade Plan We still plan to enter a multi day bull trade via TQQQ when:
Our schedule does not permit us to do quick intraday trade on Thursday. But we shared a setup for you to monitor and test a Quick Bear position with UVXY. Click here for Signal Trades spreadsheet. 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. Click here for Signal Trades spreadsheet. We have to be out of the office starting at 2:15 PM ET today. So we'll try to guide you with the post FOMC trade, but we won't be able to stick around to monitor in the afternoon. Updates 2:12 PM ET- Wednesday 3/22/23 Waiting for $VIX setup According to CNBC: "The Federal Reserve on Wednesday enacted a quarter percentage point interest rate increase, expressing caution about the recent banking crisis and indicating that hikes are nearing an end." It's the "hikes are nearing an end" that got bulls excited. But as expected, $VIX is anchoring to rise. We continue to monitor for the bullish setup described below to scale into bull position via TQQQ. We're out of the office for now the rest of today, but we'll post updates for Thursday as normal. Updates 1:08 PM ET- Wednesday 3/22/23 Setup to monitor at FOMC announcement
This is the low-risk setup to enter bull positions in ES NQ RTY. We plan on scaling into TQQQ if we see this setup. If the setup doesn't show up, we will stay out. This means no bear position. Just cash. We want only the low-risk, high-reward, high-probability setups to profit from. Updates 1:56 AM ET- Wednesday 3/22/23 Projections for FOMC On Wednesday at FOMC announcement, we think the Fed is likely to:
Traders are currently heavily hedged via puts. If the Fed doesn't do something super hawkish like raising rate by 0.5%, we should see traders unwind these hedges after FOMC announcement. Recall that when dealers sold these puts, they balanced their own books by shorting equity futures. So as puts are monetized, dealers will cover their own short positions. The net effect is a short squeeze. This means ES NQ RTY are likely to rise post FOMC, as $VIX is likely to continue dropping. Key S/R levels The levels have been updated to reflect the bullish momentum. Almost all the signals are bullish at this point. Right after FOMC announcement, we will be monitoring for a quick $VIX spike up to the zone 23-24. If $VIX forms another lower high top about here, it's very bullish condition and we would enter the multi-day bull position TQQQ at this point. Click here for Signal Trades spreadsheet. 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. Click here for Signal Trades spreadsheet. Updates 10:39 AM ET- Tuesday 3/21/23 $VIX likely to retest 23 today and 25 tomorrow Conditions are overall quite bullish. However, we are about to experience a small rise in $VIX this morning.
So for today, we'll trade LABU instead of SVIX for a quick bounce similar to yesterday. Updates 1:20 AM ET- Tuesday 3/21/23 Projections for FOMC On Wednesday at FOMC announcement, we think the Fed is likely to:
Traders are currently heavily hedged via puts. If the Fed doesn't do something super hawkish like raising rate by 0.5%, we should see traders unwind these hedges after FOMC announcement. Recall that when dealers sold these puts, they balanced their own books by shorting equity futures. So as puts are monetized, dealers will cover their own short positions. The net effect is a short squeeze. This means ES NQ RTY are likely to rise post FOMC, as $VIX is likely to continue dropping. Key S/R levels The levels are the same for now. Monday's market actions pushed the signals more towards bullish. Our personal trade plan Our plan is to trade:
Click here for Signal Trades spreadsheet. 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. Click here for Signal Trades spreadsheet. Updates 1:00 AM ET - Monday 3/20/23 Banks may be rescued for now, but ... ..their collapse will slow down the economy and opens the door to a recession. This is becoming a likely scenario. Read more here. Upcoming key events All eyes will be on the Fed at this week's FOMC announcement. The likely outcome at this point is a 0.25% rate raise with wordings about a pause to follow. Earnings this week Chart courtesy of Earnings Whispers. Key S/R levels The table below has been updated. Our indicators have slipped back more into mixed mode, but the key indicator $VIX is still bullish. In preparation for Friday, we had written: Now $VIX is likely to form a 3rd lower high top in the zone 26 - 26.5. This is a highly bullish setup for ES NQ RTY. Indeed on Friday, $VIX got up to 26.14 and then dropped. It is not done building the 3rd lower-high top yet though. We would not be surprised if $VIX spends Monday and Tuesday going sideway in this zone to form the 3rd top ahead of FOMC. Traders are still nervous and are likely to hold on to their puts to hedge against FOMC. But unless the Fed becomes unexpectedly hawkish, when these puts are unwound after FOMC, dealers will have to cover their own shorts and the result can be a moderate short squeeze. This means ES NQ RTY are likely to rise post FOMC. But beware that ES NQ RTY may retest S1 while $VIX is forming a top. Recall we said that price actions can head down while $VIX heads down also. This is a bullish divergence, and eventually ES NQ RTY will wake up and reverse bullishly. Our personal trade plan In the spreadsheet, we've shown two trade setups:
Click here for Signal Trades spreadsheet. 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. |
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