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Good Thursday morning!
We saw massive selling in the markets yesterday, especially in large cap tech stocks. and as I mentioned previously, the price action was signaling lower and well that's what we got in a big way. As most of us know, this pullback is long overdue, but we are now off to a good start. Caution however....Because of the large drop the last few days, we could be in for a short covering, or buy the dip rally, but as I have talked about several times in this newsletter, let's see just how strong the bounce is going to be! The strength, or lack thereof, is a big clue and that is what I pointed out yesterday morning.....
"This is an important clue as to the strength (or weakness) of any market and the fact that the "beach ball market" could bounce back up and not take it higher.... AND stay there.... is a big tell in our opinion More downside coming!"
Well today we will be using the same playbook as yesterday. How strong will the bounce be..if we even get one at all?!?! Overnight lows took out yesterday's lows however we are well off those levels. This is a reversal signal. Use yesterdays low as a line in the sand so long above 5462 or short below. I am talking about S&P futures.../ES..but you can use the same method in whatever you are trading. /NQ, /RTY, or the stock of your choice! If the tempo and momentum increase then look for the next target @ 5490 which is the overnight high and single prints, then 5505.50 which is the POC (Point of Control).
This morning futures are mixed so expect big intraday volatility either way. As I mentioned I feel we could be in for some short covering but I don't have a crystal ball so I will use the key levels and targets below!
VPOC Update: TWO VPOC's taken out below and yes another was added above @ 5611.25. These are signs for bearish (selling) price action.
TARGETS AND KEY LEVELS TO WATCH:
/ES upside target is: 5525 - 5530
Key Level: 5490 Single Prints & Overnight High
downside target is: 5460 - 5440
/NQ upside target is: 20,435 - 20,475
Key Level: 19,237 POC
downside target is : 19,025 - 18,975
/RTY upside target is: 2239 - 2243
downside target is: 2182 - 2278
Economic Data:
Durable Goods @ 8:30 AM EST
GDP @ 8:30 AM EST
Jobless Claims @ 8:30 AM EST
Natural Gas Inventories @ 10:30 AM EST
More Color.......
/ES - Demand $5451 LOD with Supply at $5520- 09 and $5550
1. Buyers trapped below $5520 and holding below after a pullback will be looking to play short targeting $5500 then new LOD
2. Sellers trapped above $5550 where Supply flips back to Demand looking to play long targeting $5575 then $5585
SPY - Demand at $539 - 540 with Supply back at $543 then at $549-547
1. Buyers trapped below $544 after a break and retest from $443 playing short targeting new LOD
2. Sellers trapped above $545 looking to play long from a break and retest targeting $547 then $548
SPX Demand at $5402-5419 with Supply at $5510-5490
1. A breakdown below $5510 and holding below after retest from $5505 I will look to play short targeting $5485 then $5460
2. A bounce above $5528 and reclaim support I will look to play long
targeting $5535 then $5550
/NQ Key Demand at $19062-19100 with Supply at $19320
1. Sellers trapped above 19325 after Supply flips back to Demand looking to play long targeting $19350 then $19365
2. Buyers are trapped below $19320 off and holding , looking to play short
QQQ Demand at $460 LOD then $457-456 with Supply above at $465-466
1. Sellers trapped above $465 looking to play long off a break and retest
from $466 targeting $468 then $470
2. Buyers trapped below $465 after a break and retest below $464 looking to play short targeting $462 then $461
AAPL Key Demand at $215 with Supply above at $1
1. Sellers trapped above $215 looking to play long targeting $217 then $218
2. Buyers trapped after a bounce below $122 playing a break and retest short
AMD Key Demand at $140-142 with Supply above at $148-147
1. A break and retest below $148 from $147 I would like to play short
targeting $145.40 then $144
2. I would only like to play long if Supply flips back to demand / Support above $149 targeting $153
Have a great day!
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