9/28 Daily Recap, Outlook, and Trading Plan
Recap
The SPX market has been tracking seasonals with extreme precision. The last two weeks of September, which are typically the worst of the year, saw ES selling virtually non-stop from the FOMC last Wednesday until yesterday’s low. After a final flush lower, ES put in a violent relief bounce/short squeeze. This process tracked nicely from Tuesday’s newsletter, with a rally to 4335 followed by a sell-down for a final leg into a new low.
The Markets Overnight
🌏 Asia: Mixed
🌍 Europe: Up slightly
🌎 US Index Futures: Choppy, down very slightly
🛢 Crude Oil: Down
💵 Dollar: Down slightly
🧐 Yields: Up
🔮 Crypto: Up
Major Global Catalysts
US GDP report shows a slight slowdown in consumer spending.
Key Structures
The large, multi-month channel in yellow remains the primary pattern. We broke it down Wednesday and went into meltdown. Things are straightforward now and bulls need to reclaim that channel at 4485 now to set a “sustained bottom”. 4335-40 remains the single most important level. It is the backtest of the 9 month base we broke out on June 1st, that started the “summer 2023 melt-up”. This connects the August 2022, Feb 2023, and June 2023 highs. This remained a battleground zone all week and yesterday, we backtested it from below and continued lower.
Support Levels
4308, 4296-97 (major), 4290, 4280, 4268-72 (major), 4258, 4254, 4245, 4231-36 (major), 4213 (major), 4205 (major), 4191, 4180, 4167-72 (major), 4153.
Resistance Levels
4314, 4320-22, 4335-40 (major), 4352 (major), 4356, 4366 (major), 4375, 4382 (major), 4390, 4399, 4410, 4419-24 (major), 4431, 4439, 4449, 4465-67 (major), 4485-88 (major).
Trading Plan
Bulls need to defend 4296-97, the single most important support level. If it fails, it's back into the same old free fall. For those who like counter-trending though, 4267-72 and 4231-36 are good spots to knife catch. On the resistance front, 4335-40 is well-tested now and it could blow through. Preferred spots to engage on the short side would be fresher levels higher up, such as 4366 now as it gives some space.
Wrap Up
Bulls put in a hammer daily candle right at 1-year-old trendline support. Now, they need to follow through. As long as 4296 keeps hold, we can base build between 4296 and 4335, then take a run to 4366+. If 4296 fails, it's sell again to 4270 then 4235.
Disclosure: This is not financial advice and is for informational purposes only. Please consult a professional financial advisor before making any investment decision
The SPX market has been tracking seasonals with extreme precision. The last two weeks of September, which are typically the worst of the year, saw ES selling virtually non-stop from the FOMC last Wednesday until yesterday’s low. After a final flush lower, ES put in a violent relief bounce/short squeeze. This process tracked nicely from Tuesday’s newsletter, with a rally to 4335 followed by a sell-down for a final leg into a new low.
The Markets Overnight
🌏 Asia: Mixed
🌍 Europe: Up slightly
🌎 US Index Futures: Choppy, down very slightly
🛢 Crude Oil: Down
💵 Dollar: Down slightly
🧐 Yields: Up
🔮 Crypto: Up
Major Global Catalysts
US GDP report shows a slight slowdown in consumer spending.
Key Structures
The large, multi-month channel in yellow remains the primary pattern. We broke it down Wednesday and went into meltdown. Things are straightforward now and bulls need to reclaim that channel at 4485 now to set a “sustained bottom”. 4335-40 remains the single most important level. It is the backtest of the 9 month base we broke out on June 1st, that started the “summer 2023 melt-up”. This connects the August 2022, Feb 2023, and June 2023 highs. This remained a battleground zone all week and yesterday, we backtested it from below and continued lower.
Support Levels
4308, 4296-97 (major), 4290, 4280, 4268-72 (major), 4258, 4254, 4245, 4231-36 (major), 4213 (major), 4205 (major), 4191, 4180, 4167-72 (major), 4153.
Resistance Levels
4314, 4320-22, 4335-40 (major), 4352 (major), 4356, 4366 (major), 4375, 4382 (major), 4390, 4399, 4410, 4419-24 (major), 4431, 4439, 4449, 4465-67 (major), 4485-88 (major).
Trading Plan
Bulls need to defend 4296-97, the single most important support level. If it fails, it's back into the same old free fall. For those who like counter-trending though, 4267-72 and 4231-36 are good spots to knife catch. On the resistance front, 4335-40 is well-tested now and it could blow through. Preferred spots to engage on the short side would be fresher levels higher up, such as 4366 now as it gives some space.
Wrap Up
Bulls put in a hammer daily candle right at 1-year-old trendline support. Now, they need to follow through. As long as 4296 keeps hold, we can base build between 4296 and 4335, then take a run to 4366+. If 4296 fails, it's sell again to 4270 then 4235.
Disclosure: This is not financial advice and is for informational purposes only. Please consult a professional financial advisor before making any investment decision
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