Daily Plan 9.8.23
Contracts Roller Over (ESZ23-NQZ23)
Good evening, readers!
Another tremendous selloff went right down to both my targets on the Emini and Nasdaq. Here were the levels used for the session:
Oil consistently maintained its position above the long level throughout the session, while Gold oscillated between both short and long levels. We were close to being on the right side for all four sectors, but we fell slightly short today.
The stock market was electrifying, with both longs and shorts introducing considerable volatility. Meta emerged as the day's star performer, skyrocketing by 10 handles directly from the long level, which resulted in a substantial surge in contract prices. Amazon also performed notably well, maintaining its strength for the remainder of the session. However, Apple took a hit due to the latest news from China, plunging below the short level and bringing about a decrease of over 15 handles when comparing yesterday's short level to today's. Nvidia, after a disappointing earnings report, reached a new low, dropping from the 500 level to 450 — a substantial decrease of two 50-handle sales from the critical order flow pivot. These movements from the order flow levels were impeccably aligned.
Day after day, we witness significant shifts in the market, making it an exhilarating time for traders who thrive in high-volatility environments. Unfortunately, the bears didn't fare well, with the VIX ending the day at new intraday lows. This, however, isn't shocking, as the dips have consistently held their ground, and the persistent climb to new heights remains evident.
LLY reached a new all-time high, touching 575 — a remarkable 125-handle rise since its recommendation to subscribers. In contrast, UNP reached my target of 210, representing a 16-handle drop below the pivotal 226 level I had previously outlined in Flow State #42.
Shifting our focus back to the oil sector, given OPEC's reduced production and Biden's stance against domestic oil, it wouldn't be shocking to see oil prices surge to between 95-100 in the upcoming weeks. This approach seems contrary to what robust leadership would adopt, especially during times when inflation is significantly influenced by oil prices. It's essential to remember that oil prices significantly impact the cost of producing and transporting goods. Hence, opposing this trend instead of aligning with it is likely to further burden consumers. While there's talk of National Gas soon revisiting the $4/gal mark, at the very least, Diesel prices have shown resilience and remained stable, which is crucial for goods transportation.
Futures contracts on the Emini and Nasdaq have transitioned to the Z series (ESZ & NQZ).
Let's conclude this week on a high note and delve deeper into my thesis for the upcoming trading day.