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Good morning friends. Happy New Year!! (well...almost)
3 down 1 to go! As we enter the last trading day of 2023, the bulls have had their way since the October 27th lows and the markets remain in a euphoric, nothing can ever go wrong state, and that makes me very nervous. That being said, the buyers seem fatigued to me and whether or not we see a pull back today or sometime next week, that is my short term thesis....I will look to sell longs and get more biased to the short side. Now please understand, just because that is my game plan and I would like to start selling this market, UNTIL I see the evidence of stronger sellers coming in, I will remain patient and watch the markets closely while NOT jumping the gun.
The reason for my call today is that we now have very evident resistance above (/ES 4839-4842) with what are called poor highs and these happened last night, yesterday during regular trading hours, and the night before. What that means is that buyers basically ran out of bullets and no new buyers came in behind those that bought at the highs of the above mentioned sessions. Point being is that we now have a serious clue of possible topping action. Value has stayed elevated and we continue one time framing higher now for the last six trading days and bulls are still in control but will they start to lose their grip?!?!
Oh and by the way, we've added yet another new VPOC below us yesterday (4821.50) and we now have 14 below us. (This is getting VERY stretched!)
/ES upside target is 4840-45
downside target is 4810-15
/NQ upside target is 17,140-150
downside target is 17,050-060
/RTY upside target is 2085
downside target is 2055
Futures are slightly lower this morning at time of writing with overnight inventory balanced to net long. We are inside of yesterdays range. 4828-30 will be one key line in the sand (prior day low and two overnight low's) then 4822-19. If we start losing these levels look for downside targets. If the buyers remain present, look for balance to higher especially if the bulls take out 4839-4842.... highs discussed above.
Economic Data:
Chicago PMI @ 9:45
Baker Hughes Rig Count @ 1:00
More Color.......
/ES - Consolidating inside Supply at $4835-$4845 pre market. Would like to see it
pushed back down to Demand at $4820-$4810 , holding to play long targeting $4830
- Buyers at the open getting trapped after new HOD with no follow through ,
pushing price back below $4838 for a break and retest short targeting $4825
- Supply flips to demand to , price holds above $4835 making new HODs
SPY - Gap Down from Supply overnight at $477. I would like to see the price push
back down holding above $476 to play long targeting new HOD. If sellers defend $478
after making a new HOD , I would need to see the price back below $477 for Puts
- Supply flips to demand , holding above $477 with a breakout above $478
- Buyers trapped at the open with a sell off to Demand at $474-$475
- Demand flips to Supply at $476 that was previously Supply before yesterday
SPX - Gap up overnight inside Supply. If price at the open holds above $4778 I
would like to play a break and retest at $4780 to play long (supply flipped to demand)
- Demand below that from Gap up on Tuesday at $4760-$4750. Really not
interested in Short unless it breaks below $4748 targeting old demand at $4720
/NQ - Sell off over night to HR trendline with demand below that at $17070-$17060
QQQ - Gap Up after some selling yesterday. If the price holds above $411 I would like
to play a Gap and Go long targeting $412.15. Only way I can play Short is if the price
pulls back past $409 holding below $410 for Demand to Supply.
AMD - Gap Up : Break and retest at $148 to play long targeting $149.80 first then HOD
- If price falls below $148 and holds on a pullback I would like PUTS target $146
TSLA - Selling off at $258 where Demand flipped to Supply , Old Demand $252-2521
GOOGL- Gap Up overnight from Demand at $141
Have a great day and everyone here at MEC wishes you a Safe, Happy and Healthy New Year!
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