Daily Plan 12.29.23
Welcome back everyone!
Once again, we see a lack of interest from institutions in the markets, leading to a stagnant situation where prices have shown only a marginal increase. As mentioned in my previous update, my observation is that short positions are piling up in the Nasdaq, which is preventing any significant upward movement in prices. While there's a possibility that this situation could shift if commercial entities in the COT report decide to offload these short positions, I remain skeptical about such a favorable outcome. Apart from this, there have been no noteworthy developments since Flow State #58 earlier this week. Unless we witness a substantial breakout from the current trading range, I anticipate a relatively slow progression for the remainder of this week, particularly on Thursday and Friday.
For those looking for specific market areas to focus on, I recommend keeping a close watch on Gold and Oil futures, as well as the primary stocks listed in the daily levels provided at the end of this newsletter.
In addition to the thesis we've been discussing throughout the week, there have been significant favorable moves in AMD, MSFT, GOOGL, META, and TSLA. It's important to note that despite the news circulating about higher production in the Cybertruck division, this development doesn't alter my outlook on a potential upcoming decline in the stock. Most of the short levels provided on a swing timeframe have experienced only minor price increases above the specified levels in relation to the target. My minimum target is typically a 2:1 risk-reward ratio, although specific stock setups may vary, with some having tighter risk parameters and others featuring more distant targets.
For example, Tesla has not even reached a 1:1 risk-reward ratio for a potential loss, so I'm not concerned about any "downside" on shorts at this time. As we've witnessed this week, stocks with swing short levels are showing clear weakness, as evident in the names listed within the momentum gallery. Beyond the mentioned stocks, we're also seeing robust opportunities that are currently working in our favor as we approach the end of this year. These favorable developments outside of the listed stocks are contributing to a promising close to the year in our trading endeavors.
The weekly newsletter “Flow State” will kickoff the highly anticipated videos. Stay tuned for next weeks release as there will be a complete breakdown of the volume profile setups going into next week. This will be visual and audio recording!
Now moving on to my thoughts for Fridays session!
Breaking Down the Profile
S&P500 (ES)
