12/14 Trading Plan - Thursday Recap and Day Ahead

📊 Market Sentiment: Bullish

Stay light on OPEX day due to the potential for choppy trading. Look for a potential base building in the 4756-83 range for a potential leg up to the 4804-08 zone. If 4756 fails, prepare for a potential pullback.

📈 The Markets Overnight

🌏 Asia: Mostly up
🌍 Europe: Up strongly
🌎 US Index Futures: Up strongly
🛢 Crude Oil: Up a lot
💵 Dollar: Down
🧐 Yields: Down a lot
🔮 Crypto: Mixed

🌏 Major Global Catalysts

• Markets rally strongly on FOMC Dot Plot forecasting 3 rates cuts totaling up to 0.9% in 2024.
  
• European Central Bank and the Bank of England each hold rates steady this morning.
  

📷 Snapshot

Daily Data Sentiment Analysis:

• EMA 9, 21, 55: Indicating a bullish sentiment with closing prices comfortably above these EMAs.
  
• Overall Sentiment: Bullish.
  

4-Hour Data Sentiment Analysis:

• EMA 9, 21, 55: Also showing a bullish trend.
  
• Overall Sentiment: Bullish.
  

📉 Support Levels

• Major: 4772, 4756, 4740-43, 4710-05, 4660-65
  
• Minor: 4764, 4724-26, 4717, 4700, 4690, 4684, 4678, 4674, 4670
  

📈 Resistance Levels

• Major: 4780-83, 4804-08, 4845, 4860-63
  
• Minor: 4787, 4795, 4816-20, 4826, 4838
  

📝 Trading Plan

Bull Case Analysis

Scenario Overview:

• Recent Trend: ES (S&P 500 futures) has experienced a strong bullish trend, marked by six consecutive green days.
  
• Bull Case Premise: Continuation of the uptrend through pattern formation and support maintenance.
  

Key Levels and Patterns:

• Support Zone: 4756, pivotal for bulls to maintain control.
  
• Target Range: 4756-4783, seen as a potential consolidation area.
  
• Upside Objective: A move towards the 4804-08 zone, acting as a magnet level.
  

Strategy and Risks:

• Pattern Building: Bulls expect ES to form a continuation pattern within the target range, setting the stage for another leg up.
  
• Risk of Breakdown: Failure to hold 4756 increases the risk of a backtest towards the 4710-05 area.
  
• Execution Caution: Traders should be wary of false breakouts and maintain strict risk management.
  

Bear Case Analysis

Scenario Overview:

• Bear Case Premise: A break below key support leading to a downward move.
  

Key Levels and Patterns:

• Critical Support: 4756, the level below which breakdown trades become viable.
  
• Target Short Entry: Around 4752, following a failed bounce at 4756.
  
• Profit Targets: First target at 4740-43, capturing the move below the day's low.
  

Strategy and Risks:

• Breakdown Trades: These are high risk/reward but have a low success rate (60% expected to fail).
  
• Execution Skill: Requires skill to execute successfully; not advisable for traders uncomfortable with these odds.
  
• Rule of Thumb: Avoid chasing the price; wait for a clear trade setup and reaction at the key level.
  

Disclosure: This is not financial advice and is for informational purposes only. Please consult a professional financial advisor before making any investment decision.