Daily Plan 10.12.23
Markets Close Higher - What's Next?
Good evening, readers!
Indices closed higher as I expected with my thesis in yesterdays Daily Plan. Here were my thoughts:
Emini (ES): My targets have been adjusted in anticipation of the upcoming releases of the Producer Price Index (PPI) and the Federal Open Market Committee (FOMC) Minutes. To be frank, I don't expect any particularly intriguing revelations in the FOMC minutes, so I believe we may see some continuation to the upside if the PPI release comes in more favorably than the previous one. If the FOMC were a major event with groundbreaking developments, the situation might be different, and the Fed's tone could shift. However, that's not something I'll be actively looking for tomorrow.
That being said, my focus is on the Emini remaining within the range of 4380-4391 in the overnight (OVN) session, which would set the stage for a strong move following the PPI release. In the event of a cooler PPI print, I anticipate a spike through 4391, possibly reaching as high as 4440. This level is above the major Point of Control (POC) inside the current major value area we're operating within. Interestingly, this POC/High-Volume Node (HVN) corresponds to today's session high. A return to this level could trigger a significant wave of shorts covering their positions, thus propelling prices higher towards my target.
Just as expected we saw a move down to 4380 which held before making a trip to new highs on the session. I was very open to remaining in longs as there was only about 10-12 handles in downside from the longs at 4390. The PPI came in hotter than expected but saw no follow through so my thesis of a move higher was a perfect call by me. Both the Emini and Nasdaq saw a new high of day into the close hitting my first area of profit taking. I think this momentum can feed into the next session but it must align with my thesis for CPI which will be posted below.
Nearly all the stocks in the Daily Plan saw massive rallies bringing 100-300% moves on contracts.
Friendly reminder, yesterday I posted my thoughts on six stocks posting earnings on Friday before market open: UNH, JPM, WFC, BLK, PGR, C, and PNC. This can be found in the “Earnings” section.