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Good morning friends! I hope everyone is enjoying this holiday season!! The team here at MEC wishes you and your families the very best now and into the New Year!
It's hard to believe but 2023 is almost in the rear view mirror and there are only 4 trading days left.
As we have been saying over the past few sessions, and even with the monstrous sell off we saw last Wednesday:
"....this auction is not finished yet to the upside and the bulls remain firmly in control of the current trend!!"
All top line figures are at or near 52 week highs and there does not seem to be a seller on planet earth. This is fine and you certainly don't want to fight the trend but we will definitely send up a warning flare once we identify that things may change.
Case in point.....value continues to hold up well (see profile pic below) and sometimes liquidation breaks (like last Wednesday) actually strengthens a market! Why? Because it takes potential sellers out!!
As long as 4760-4740 holds in the /ES, the bulls remain in control. (In the SPX, the key levels are 4715-4695) Meaning as long as price and more importantly value stays above said levels, the bears don't have a prayer. Now that being said, PLEASE don't get complacent. We have been in an uptrend for quite some time and one of these days, a liquidation break like last Wednesday can happen at anytime and the move will actually stick!
Please pay close attention to the yellow shaded areas in the profile pic below....as long as the buyers continue to have no fear and put capital to work, and we stay above the upper end of the target band (4760), the current trend remains theirs.
We put in a new VPOC above and below the past 2 trading days and that is more indicative of "balance". We still we still have 10 below us and now one above @ /ES 4823.
/ES upside target is 4830-35
downside target is 4780-85
/NQ upside target is 17,070-090
downside target is 16,900-920
/RTY upside target is 2065-70
downside target is 2040-45
Futures are up about 4 points this morning at time of writing with overnight inventory 95% net long. We are inside of Fridays range. 4804-4805 will be a key line in the sand as this is where the POC and Pivot Point sit for today.
Economic Data:
Case Shiller Home Price Index and FHFA House Price Index @ 9:00
Dallas Fed Manufacturing Survey @ 10:30
These are usually NOT market moving numbers
More Color.......
GM Team !!! Hope you had an amazing holiday . As we close out the year, two key
questions : are the bulls still in control with a Santa rally to break HOD ? Or will the rug
get pulled and we see a massive sell off? Something’s got to give, so watch your levels,
preserve capital and be patient. Personally , this is a week of less trades , sizing down
and preparing for 2024.
/ES - Consolidating above demand at $4785-$4800 , would like for price to break and
retest this area , holding above to play long targeting $4810 first then Supply above.
- Key Supply $4820 - $4835 ( HOD at $4830.75 from last Wednesday) if buyers
get trapped at the open and price holds below I would like to play short.
- Watching for Demand to flip to Supply or Demand to hold breaking into HOD
/NQ - Up trend pre market approaching key Supply at $17050 - $17075. Ideally I would
like the price to hold within this range, to play short if it breaks HOD with no follow
through. Playing short targeting $16980 first then Demand at $16870- $16900
- If buyers get trapped at the open with a sell off and price holds above demand
and $16925 I would like to play long targeting key supply above at $17050
SPY - Key Supply Zone at $475.9 HOD from last Wednesday, which should be tested
(Trapping Buyers) causing a sell off pushing price back down too Demand $472-473.
- If sellers are present at the open and price holds below $477 I would like to play
a break and retest at $475 - $476 playing PUTS targeting $473.95
- If there its a strong Sell off at the open and price is pushed back down to $471-72
and it holds above I would like to play long targeting $474 first then $475
QQQ - Key Supply HOD at $410-411 , would ideally like to see buyers trapped at the
open with price back down to HR trend line $407 with it holding above playing long
targeting $409 first followed by $410. If price brakes below key demand at $404
- Break and rest supply $410 short targeting HR trend line and demand
- Bounce and Go at trendline $407 playing calls targeting $408.80 first then $410
SPX - I would ideally like to see sell off at the open with price back down inside key
demand at $4700 - $4720 , holding above to play long targeting $4740 first then $4755
TSLA - Gap Up Over the weekend riding the hourly trend line and consolidating above
key demand at $249-$251 looking for it to break and new HOD with buyers trapped at
the open , with a sell off looking for a break and retest from key demand to play long.
The only way to short this would be if price falls below $248 and retest $249 holding to
play short targeting next demand at $247.
NVDA - Consolidating inside demand pre market at $486-$488
AAPL Selling off from key Supply Zone at $195 that was previously Demand
MSFT - Rode the HR trendline up to Supply where its consolidating inside $375- $377
Have a wonderful day!
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