Good evening folks,
Market closed almost unchanged today as it tries to position for a very important day tomorrow!
Let’s go!✌️
MARKET REVIEW
If you want to have text book example of a range/choppy day, you can zoom in today’s intraday action. Big wild swings only to close unchanged.
Tomorrow is a very important day that will move the market. We’ll take a look deeper in the “economic calendar” section, but keep in mind that today choppy action was to be expected and don’t expect nothing wild tomorrow morning until 14:00 EST as well.
We are in a wait & see situation as we’ll want to let the storm pass tomorrow after noon and assess the damages or reversal tomorrow night.
Keep in mind that what Jerome Powell will say at the press conference (14:30) might have a big impact as well. You also want to remember that very often the first move is the false move. So personally I prefer to sit it out for a while until things really confirms.
Bullish scenario:
Again, a one day reversal would not act as a bullish scenario for me. It will take bottoming action, a close above 5dma before I even consider covering my short & putting back long exposure. Stay tuned when we’ll get there.
Bearish scenario:
First pivot of interest is 1698$ which was last May bottom, BUT also pre-COVID crash high. Next important level of interest is 1594$ from 2020 market rally structure. A close below 1698$ tomorrow would be bearish for the EOD action.
MARKET BREADTH
McClellan unchanged at -254, so we just trigged my oversold level here. We can stay oversold a couple days while being in market selloff, so I keep it on the back of my head.
Stocks > 50dma continue to selloff and now back at 15%. We begin to be in the oversold area. Note that if it’s a real selloff like ‘08, ‘00, etc. We went even lower than 10, so keep that in mind.
VIX inside day…waiting for FED as well.
ECONOMIC CALENDAR
BIG DAY TOMORROW!
We have interest rate decision at 14:00, then FOMC and press conference at 14:30.
Market NOW PRICING IN a 0.75% rate hike on Wed…which we didn’t see before CPI data last week. We were around 2-4% probability before CPI & 23% this wknd…92.7% yesterday and now 99%!!
SECTORS PERFORMANCE
Some interesting strength in Retail & Semi’s today. We’ll have to see if it confirms. As you’ll see in the FocusList section, my 2 names are in retail and sneaking in stage 1 breakout…so we might confirm the sector strength with individual names confirming setups.
Crude Oil (CL_F) Failed his BO10PB at DTL breakout and closed below 119.98$ pivot. Important commodity to hold if you want to see Oil stocks continue to hold their 10 & 21dma.
PORTFOLIO UPDATE
Still managing my TZA position right now. I took another 1/2 out today as I wanted to go lighter into FED tomorrow. I have a very nice trade right now and want to protect my gains going into a gamble event tomorrow.
Risk first and manage probability. Right now, for me, probability are not high enough to keep a full size position into FED, FOMC & Jpowell together. One small word and market can overreact.
You want to PLAY DEFENSE first, this is a SHORT or CASH market right now, make no mistake.
New positions:
Trimmed positions:
TZA (50% scale out before FED - risk management)
Closed positions:
DAILY FOCUSLIST
2 names in my FocusList tonight
Yes, we have some interesting names in a specific sector. Both are in retail, shows & clothing. They are both at very interesting levels for a stage 1 base breakout & stage 3 continuation base breakout.
Will I take these trades into FED tomorrow…no! But what if we get a huge reversal ? I want to be ready with names in my Focuslist with which I can draw some dry powder.
Listen, worst thing is to get caught unprepared…you’ll take a bad decision I can guarantee that!
Also want to remember you that with the 20$/m premium membership comes a SLACK channel access that you can join to chat with me directly & the community of people trading the PT trading system. Enjoy it while it last, because this private access will not be this cheap as the community grows.
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