2024-12-11 - priceactiontds - daily update - sp500
Good Evening and I hope you are well.
tl;dr
sp500 e-mini futures - Bullish breakout again. CPI was in line and no one cares about bad news, when markets can only go up. Same reasoning for sp500 & nasdaq as on dax. We can do higher highs but I don’t think we will go much further. Sideways inside the given range is my assumption. Sp500 will likely hit 6000 before end of the week.
comment: Late rallies in trends based on neutral news (at best) is never a reason to expect big follow through. Bulls printed a good daily but still a lower high. A measured move up would get us to around 6130, depending on how you calculate it. Since I have another target around 6160, it’s somewhat ok. There are also 2 upper bull trend lines but they are above 6200, so let’s not focus on them as of now. I still have my doubts we just move higher in an Opex week with that euphoric sentiment but I won’t say it can not happen. Tomorrow will be important. If bulls don’t get the follow through, we will likely test 6000 next.
current market cycle: bull trend - late and will end soon
key levels: 6000 - 6170
bull case: Bulls should not let the market drop below 6070-6080 if they want the momentum to continue. We have the obvious target 6113 and above that I got 6130 next. How likely is another strong leg up? Bulls bought near the bull trend line and we are inside a decent channel and nested bull wedges. They have many arguments on their side to continue higher inside the current structure.
Invalidation is below 6000.
bear case: Bears quickly gave up after the CPI spike and let the market rip to 6100. The bears can argue a couple of things. First is the euphoric sentiment in a globex week. It’s unlikely that we close the week at the very highs. Next is the higher time frame argument for a two-legged pullback. On the daily chart the move down to 6039 can be seen as A, B today hit 6102 and C could give us 5973 or at least 6000. If I had to guess as of now, chop between 6050 - 6100 is the most likely outcome.
Invalidation is above 6130.
short term: Neutral. I won’t buy near or above 6100 but I will also not short after a 50 point ripper. Tough spot right now and I expect more fake moves to both sides until end of Friday.
medium-long term - Update from 2024-12-11: Will write an update after Opex on Friday. If we stay above 6000, can print 6200 easily into year end. If Friday closes below 6000, we could drop some more and upside above 6100 will also probably be limited.
current swing trade: Nope
trade of the day: Question on those news spike is always, could you have anticipated it? Don’t play that game, it’s a fools game and you have no edge. Next best question is, could you have longed after the initial spike? Yeah you can but stop had to be 6045 and that would have been 20+ points already. Since market just continued above the 5m 20ema, any long was obviously the right call after the spike. Still tough to take since your stop is so far away.
tl;dr
sp500 e-mini futures - Bullish breakout again. CPI was in line and no one cares about bad news, when markets can only go up. Same reasoning for sp500 & nasdaq as on dax. We can do higher highs but I don’t think we will go much further. Sideways inside the given range is my assumption. Sp500 will likely hit 6000 before end of the week.
comment: Late rallies in trends based on neutral news (at best) is never a reason to expect big follow through. Bulls printed a good daily but still a lower high. A measured move up would get us to around 6130, depending on how you calculate it. Since I have another target around 6160, it’s somewhat ok. There are also 2 upper bull trend lines but they are above 6200, so let’s not focus on them as of now. I still have my doubts we just move higher in an Opex week with that euphoric sentiment but I won’t say it can not happen. Tomorrow will be important. If bulls don’t get the follow through, we will likely test 6000 next.
current market cycle: bull trend - late and will end soon
key levels: 6000 - 6170
bull case: Bulls should not let the market drop below 6070-6080 if they want the momentum to continue. We have the obvious target 6113 and above that I got 6130 next. How likely is another strong leg up? Bulls bought near the bull trend line and we are inside a decent channel and nested bull wedges. They have many arguments on their side to continue higher inside the current structure.
Invalidation is below 6000.
bear case: Bears quickly gave up after the CPI spike and let the market rip to 6100. The bears can argue a couple of things. First is the euphoric sentiment in a globex week. It’s unlikely that we close the week at the very highs. Next is the higher time frame argument for a two-legged pullback. On the daily chart the move down to 6039 can be seen as A, B today hit 6102 and C could give us 5973 or at least 6000. If I had to guess as of now, chop between 6050 - 6100 is the most likely outcome.
Invalidation is above 6130.
short term: Neutral. I won’t buy near or above 6100 but I will also not short after a 50 point ripper. Tough spot right now and I expect more fake moves to both sides until end of Friday.
medium-long term - Update from 2024-12-11: Will write an update after Opex on Friday. If we stay above 6000, can print 6200 easily into year end. If Friday closes below 6000, we could drop some more and upside above 6100 will also probably be limited.
current swing trade: Nope
trade of the day: Question on those news spike is always, could you have anticipated it? Don’t play that game, it’s a fools game and you have no edge. Next best question is, could you have longed after the initial spike? Yeah you can but stop had to be 6045 and that would have been 20+ points already. Since market just continued above the 5m 20ema, any long was obviously the right call after the spike. Still tough to take since your stop is so far away.
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