Daily Plan 10.13.23
Good evening, readers!
Today's trading session proved to be quite a rollercoaster for the bulls, ultimately resulting in a significant sell-off that favored the bears. Notably, there was a pronounced rejection from the long level for both the Emini and Nasdaq markets. This sell-off, while substantial, was not unexpected, given that my short targets had encompassed nearly the entire sell-off, reflecting the market's structural signals for a substantial decline if we breached the short levels.
Let's revisit the text from yesterday's plan, which was formulated based on the market structure that unfolded during the previous night:
For longs, I'll be looking for entry points around 4427, which is slightly above the previous session's high, aiming for continuation higher up to the current Value Area High (VAH) at 4455. On the other hand, for short positions, I'll be closely monitoring price action to identify a strong downward move that breaks below the Point of Control (POC) within this major value area. A break below the POC would signal a potential sell-off down to the Value Area Low (VAL) and potentially even below it, down to 4369.
As previously noted, the breakthrough at the Point of Control (POC) was significant, as this level represents where the majority of positions are held on a swing trading basis. When we find ourselves above the POC, it implies that shorts are in a precarious position, while savvy traders may consider taking short positions at the Value Area High (VAH). Conversely, when below the POC, long positions could be in trouble, and it may be opportune to consider buying at the Value Area Low (VAL). However, it's essential to bear in mind that these dynamics can change, especially in light of the current market trend.
I continuously update my analysis of the market structure and trend on a daily basis to ensure that we're not caught on the wrong side of a significant market move. Today serves as a prime example of the importance of this vigilance, as we witnessed a substantial sell-off immediately after breaching my short-level thresholds. In fact, both my Emini and Nasdaq short targets were nearly met as we approached the day's low. On days when significant events are released, it's typical for the trading range to expand, and today was no exception, despite some anticipating choppy conditions.
Tesla made waves in the market today, experiencing three sell-offs from my short levels. These moves resulted in two 100% rallies on put contracts and then a remarkable 300% rally by the end of the day. Similar scenarios unfolded for GOOGL and META, both of which witnessed complete collapses below my short levels.
Gold started strong during the overnight (OVN) session, surging right up to my long target before peaking at the high of the day (HOD), which aligned with my target.
Meanwhile, oil faced another sharp decline, hitting the day's low (LOD) precisely at my short target of 82.28.
Now, let's delve into my insights and expectations for tomorrow's trading session as we wrap up what has been a remarkable week. 7 stocks I gave targets on post their earnings tomorrow which is going to bring a busy session.