Daily Plan 8.9.23
Party at Mickeys Clubhouse
Good morning, readers!
Let's begin by examining the contents of yesterday's newsletter, which have materialized precisely as we had foreseen. This successful realization of our expectations underscores the accuracy of my predictions and highlights the value of the insights provided in this newsletter.
Will the Selling Continue for Today's Session?
Indeed, the selling momentum is poised to persist throughout today's trading session. To simplify our analysis, we will rely on the concept of value areas to substantiate this hypothesis. Specifically, for the Emini, it is crucial that it maintains a position below the 4517 mark, while the Nasdaq must also stay below 15384.
For those early risers tuned in to X, I provided preemptive signals about the intensification of this selling trend earlier this morning. This foresight was vindicated as the Emini relinquished a substantial 12-point decline, and the Nasdaq experienced a notable 60-point drop. Moreover, our predictions remain aligned with the ongoing decline in both Gold and Oil markets, lending further credence to our overarching thesis.
In retrospect, the Nasdaq short trade unfolded precisely as anticipated. With an initial position at 15,384, the market displayed remarkable responsiveness as it swiftly moved to our target at 15,227. The day's low, situated in the 15,220s, reinforced the accuracy of our predictions, resulting in a substantial gain of +157 handles. This successful trade highlights the importance of astute market analysis and reinforces the benefits of adhering to well-founded strategies.
Similarly, our Emini short trade at 4,517 showcased a high level of accuracy, coming close to achieving our target at 4,470. Although the market seemed poised for a more significant decline, it found support at 4,481, ultimately yielding a commendable gain of +36 handles. This scenario underscores the intricate balance between market dynamics and our projections, underscoring the need for adaptability in response to evolving conditions.
The oil market underwent a notable collapse, only to swiftly rebound with vigor, reaching our predetermined target of 83. This sequence of events illustrates the volatility inherent in commodity markets, where rapid shifts can lead to both challenges and opportunities. The subsequent rebound further emphasizes the necessity of being attuned to market sentiment and underlying factors.
The gold trade encountered its share of fluctuations, dipping from 1,965 to 1,956 on two occasions before stabilizing for the remainder of the session. This pattern exemplifies the inherent ebb and flow of trading, where meticulous observation and swift decision-making are paramount in navigating a dynamic market environment.
One standout performance was observed in the case of $LLY, which experienced a significant surge following a well-timed earnings release. The breach of the 500 level triggered a parabolic ascent, propelling the stock to the 530s, a move that was accurately predicted. The day concluded with a notable 15% gain, demonstrating the potential rewards of informed investment decisions.
TWLO 0.00%↑ despite an initial dip post-earnings report, demonstrated remarkable resilience by swiftly recovering and surpassing previous highs. This rapid reversal resulted in an impressive 11% spike, showcasing the value of staying attuned to market sentiment and identifying opportunities amidst short-term fluctuations.
Notably, DUK 0.00%↑ emerged as a prominent performer, contributing to a session that was dominated by strength in the energy sector. With a nearly 3% increase, Duke Energy exemplified the potential for substantial gains in specific sectors, underscoring the significance of sectoral analysis in strategic decision-making.
Conversely, tech giants such as META, MSFT, NVDA, and AMD faced notable declines, slipping below key levels. Despite this, the broader technology sector managed to maintain a balanced session, with most stocks not straying far from their highs. This scenario underscores the resilience of the tech sector in the face of challenges, revealing its potential for recovery and adaptability.
Sector Performance (Previous Session)
Yesterday, the sector performance demonstrated a mixed bag of results on an intraday timeframe. Despite a mostly subdued market, some sectors stood out with significant moves. Energy emerged as the star performer, showcasing an impressive surge of 2.10%. This surge was largely driven by Duke Energy's remarkable post-earnings rally, validating our insights from the previous day.
Meanwhile, other sectors experienced relatively modest fluctuations. Materials (XLB) posted a noteworthy gain of 0.75%, indicating resilience in the industrial supply chain. Real Estate (XLRE) followed suit with a gain of 0.43%, suggesting a stable demand for properties. Health Care (XLV) and Financials (XLF) also displayed positive sentiment, each with gains of 0.25% and 0.36% respectively.
On the flip side, a few sectors encountered minor setbacks. Consumer Staples (XLP) witnessed a decrease of -0.66%, possibly reflecting shifting consumer preferences. Technology (XLK) and Communications (XLC) experienced slight declines of -0.03% and -0.06% respectively, potentially mirroring cautious investor sentiment.
Amid these dynamics, it's apparent that the energy sector's robust performance, led by Duke Energy's impressive post-earnings surge, has set a positive tone. However, the nuanced responses across various sectors indicate a cautious and discerning approach by investors.