Daily Plan 4.11.24
Welcome back everyone!
First, we will cover the recap for today's session, then move on to tomorrow's analysis.
Indices:
As anticipated, the inflation data was released, showing significant increases, which triggered a substantial sell-off in both the Emini and Nasdaq markets. In the case of the Emini, prices plummeted below the 5238 short level, initiating a considerable sell-off that drove the market down to the 5180 target, capturing a 58-handle decline, representing nearly all of the selling pressure.
Turning our attention to the Nasdaq, the short level was identified at 18306. Once breached, it led to a significant sell-off, driving the market down to 18038, just a few handles away from the session's low. This amounted to a 250-handle decline from the short level to the session's low. The impact of this sell-off rippled through the stock market, contributing to a major gap down, particularly affecting companies like AMD and the broader tech sector, which experienced significant sell-offs as a result.
Commodities:
Oil closed the session at its highs, behaving precisely as I had anticipated. If inflation were to surge, then it was expected that oil would rally accordingly. Despite the overarching thesis pointing towards a rally for the remainder of the week, prices began their ascent following the release of the inflation data.
Gold initially moved in tandem with the indices before stabilizing and closing nearly unchanged. I firmly believe that prices will reach new highs by the week's end, particularly if the Producer Price Index (PPI) data comes in higher than expected tomorrow. The uncertainty looming over funds may prompt them to hedge against any market downturn by either purchasing gold or withdrawing significant investments from the markets altogether. This dynamic could further bolster gold prices in the near term.
Stocks:
AMD experienced significant selling pressure following the release of the Consumer Price Index (CPI), resulting in a fresh low for the week and a continuation of downside movement throughout most of the session. Whether prices can breach these lows will largely depend on the Producer Price Index (PPI) data. Contracts identified earlier this week, as well as those identified last week, have seen substantial movements in premium.
AAPL also faced selling pressure throughout the entire session, with the high of the day (HOD) falling just below the short level, resulting in over 2 handles of selling during today's session.
Similar to AMD, MSFT encountered persistent selling pressure throughout the session, with the HOD falling just below the short level. This led to over 5 handles of selling below the short level, impacting both this week's contracts and the prices of common shares.
TSLA opened the session positioned between the long and short levels, but soon faced selling pressure, dropping below the long level. Prices swiftly declined below the short level at 173.63, resulting in over 3 handles of selling during the session.
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