Good morning readers!
To start this newsletter, I will reintroduce the Nasdaq and Emini thesis as we find ourselves in a state of uncertainty, characterized by a consolidation phase. We witnessed a significant sell-off, with the market approaching the short target of 4410. Looking ahead to today's trading session, I am looking for a reclaim above 4060 to validate long positions.
Allow me to recap what was discussed in the previous newsletter and reiterate its relevance for today's analysis:
In today's session, my primary objective is to observe a reclaim back into the previously mentioned value area. This particular move will signify a potential shift in market dynamics and would subsequently shift my focus towards long positions, with the target set at the Value Area High (VAH) of 4495, similar to yesterday's session. However, in the event that selling pressure persists, resulting in a sustained price movement below the level of 4060, I anticipate the emergence of selling opportunities. Should this scenario unfold, my outlook would pivot towards initiating short positions, targeting a downward move towards the subsequent value area located at 4436, which represents a key support level for consideration.
The Nasdaq and Emini exhibit a high degree of correlation, and therefore, I will replicate yesterday's plan as it remains relevant for today's trading session. Half of the plan from yesterday has already materialized successfully, while the other half remains valid at present.
As previously indicated, there was a substantial selling pressure observed, resulting in a decline from 15220 to 15120, as highlighted below.
During the overnight session, Nasdaq exhibited considerable weakness, experiencing a decline that reached the subsequent value area. This downward movement in Nasdaq was mirrored by a broader decline in the technology sector, resulting in a significant market shift. In light of this development, it is essential to monitor if the price can sustain resistance around the 15220 level, as a failure to do so could potentially pave the way for further downside momentum. Should this scenario materialize, my objective would be to observe a continuation of the downward trend towards the 15120 level, which represents the Point of Control (POC) within the subsequent major value area. Conversely, if the 15220 level fails to act as a significant resistance barrier, my sentiment would turn bullish, anticipating a potential rally back into the previously mentioned value area. It is worth noting that the main target for long positions lies at 15350, which coincides with the POC of the upper value area.
Not to get ahead of the plan, let’s get back to some winners from yesterdays Newletter!
Gold experienced a robust trading session yesterday, characterized by an initial downward movement below the price level of 1913, which was fiercely defended by market participants. Subsequently, the precious metal managed to reclaim its position above this level for the remainder of the session. As of the time of writing this post, gold is currently trading at 1922.
In order to gain a comprehensive understanding of the market outlook, it is essential to read the following section, where I present my thesis on Emini, Nasdaq, Oil, and Gold Futures. Each day I will provide analysis for each as follows:
Update on Rivian: The stock is currently trading at 22, a significant increase from its initial price of 13.5, which was supported by a key order flow. It is important to note that this stock is anticipated to follow a similar trajectory as Tesla, with the thesis being that it will continue to rally until the trend unfolds. As the value of the stock continues to rise, our pivot for breaking out of the upper value also moves up. By keeping this in mind, we can maintain our positions for extended periods while preserving our mental capital.
Today, Rivian has reached new year-to-date (YTD) highs, attracting the attention of retail investors on the main stage. Our upside target is set at 28, although it is crucial to acknowledge that the stock has the potential to rise even higher if the current trend remains valid. Once the stock reaches the 28 mark, it would be advisable to reduce the size of our position and minimize the associated risks.
Scanner (Finviz)
MARA: Holds above 12 and this can make a trip u[ to 18-20. Clean value area built on way up from 9. 12 will keep this uptrend valid for attempts to push prices higher.
XPEV: Nearly the same setup as MARA in which i want to see value area for this uptrend to remain valid. Price needs to remain above 11.2 for attempts higher up to 18.
CUK: Strong uptrend with stock up 100% in weeks. I see this momentum continuing as long as price can remain above 14. Stock currently sits at 17 which I think can see a move up to 25.
IONQ: Holding value very well but I want this to remain above previous value area down at 9-11.10. If we remain above VAH then I see price moving up to 17-18 handles. Stock is currently sitting at 13.37.
YNDX: Strong move higher in recent weeks but now starting to unfold to the downside. If price can remain below 2550, I think we can break recent lows for a sell down to next value at 2150. Upon breaking 2275 this can unleash heavy selling.
QS: As long as this can hold above 6 which is a major VAH on a higher timeframe. This can continue momentum higher with 2023 highs sitting up at 12 which I think can be visited soon. As long as this holds trend I want to look to hold runners through 12 and up to 18 where value begins to drop off on the upper end.
RIOT: Breaking out to the upside of multi month balance. This can fuel a strong rally higher especially once taking out 14. I want this to remain above 10.50 for attempts higher up to 18-20.
Events
Earnings
Session Outlook
ES