Weekly Outlook 7.17.23
Earnings are back!
Greetings, valued readers!
I trust you all had a splendid weekend and managed to recharge for the productive week that lies ahead. The futures market exhibited minimal fluctuations during the overnight session, apart from a continued decline in oil prices. Rest assured, our core belief in the prevailing uptrend remains resolute, as this week has introduced fresh pivotal points that warrant attention on the weekly timeframes. For those traders seeking a more flexible approach, especially those who find themselves momentarily away from their trading stations, I highly recommend exploring the merits of swing trading. This strategy holds promise even for traders who may not possess extensive market experience. By meticulously mapping out key levels during each session and conducting comprehensive reviews at the day's end, you can gain invaluable insights into your trading journey.
Let's take a moment to reflect:
What factors contributed to setbacks and challenges?
Conversely, what factors propelled your success and achievements?
Once you've accumulated a substantial record spanning approximately one to three months of trading sessions, it's worthwhile to scrutinize the data for patterns that reveal your individual strengths and weaknesses. By capitalizing on your strengths and working diligently to mitigate any weaknesses, you can refine your trading approach and enhance your overall performance. Remember, it's more effective to excel in areas that align with your natural aptitudes than to spread yourself thin attempting to master every aspect of the market. Embrace your uniqueness and leverage it to your advantage.
First steps to Volume profile for everyone will be reading my Introduction to Volume Profile.
Now back to this weeks outlook!
First, we will layout the charts of the S&P500, NASDAQ, Gold & Oil. (in order)
FYI: Chart Deck coming this week!
All four of the mentioned assets experienced positive gains by the end of the week, without exerting significant downward pressure on the market indices. Although I agree that a rise in gold prices may lead to some selling activity, it is important to note that the current upward movement is not driven by panic. As I mentioned last week, there are no catalysts that have caused investors or the general public to speculate about future developments. By using these pivot points as indicators of the prevailing trend, we can consistently align ourselves with the market and disregard extraneous information that lacks meaningful signals.
The charts presented above this section illustrate the performance of the previous week only and do not display the value areas below the current price. When searching for significant levels within this substantial uptrend, it is necessary to zoom out and examine data that encompasses the expected range of volatility for the upcoming week. Therefore, if I anticipate a range of 100-150 handles in either direction this week, there is no need to extend the analysis of value areas beyond this range. We can always revisit these additional value areas when the price approaches them.
Below will show many prices for Emini but the chart has zones showing the value areas I see.
The developments of last week have had little impact on the setup for the upcoming week. The primary outcome was a continuation of upward movement, with prices opening above the Value Area High (VAH) to establish new value levels above 4500. On early Wednesday, there was a retest of the VAH, but the market quickly responded with buying activity, indicating that the previous value is no longer considered a fair price. The market's intention is to explore higher price levels and assess investor sentiment. The confirmation of trading above the previous VAH clearly signals the current inclination to move higher.
Given the prevailing uptrend, any short positions at the VAH of the current value are invalidated. However, on an intraday timeframe, a break below the previous VAH at 4494 is likely to result in a retest down to the Point of Control (POC) at 4419. Although not an ideal scenario for a correction within this uptrend, it is important to note that the pivot point for the trend is at 4400. If selling pressure drives prices down to the POC, it suggests a preference for holding positions in anticipation of a trend reversal. In the event that prices break below 4400 but subsequently reclaim that level, I would revert to a bullish stance.
The reason behind the analysis is as follows:
The current price action indicates a rejection at the lower end, suggesting that prices between 4381 and 4494 are considered fair. The fairest prices within that value area correspond to the location where the highest volume was traded, indicating that we can expect a revisit to that price range at the very least. Reclaiming the 4400 level would indicate a target of 4438, which falls above the Point of Control (POC) but within the upper range of the High Volume Node (HVN) inside the Value Area (4406-4440).
The overall uptrend remains intact for both the Emini and Nasdaq.
While there has been significant attention given to data analysis recently, the focus has shifted primarily towards profiling. This is not to say that data is irrelevant, but currently, there is no intention to alter trading strategies based on data that will not alter the prevailing direction. Until an outlier print emerges, the momentum for higher prices will continue. It is important to recognize that at some point, this momentum will subside and a correction will be necessary. However, attempting to predict rather than react to such changes can expose one to unexpected risks.
The subsequent analysis of other indices will be presented below, as per usual. However, it is recommended to utilize this information as a reference when determining levels for any of the indices.
Scanner (Finviz)
RXRX 0.00%↑ GDRX 0.00%↑ COIN 0.00%↑ CVNA 0.00%↑ UPST 0.00%↑ EXPI 0.00%↑ RIOT 0.00%↑
Events
Earnings
So many earnings to cover this week so day by day I will be posting my thesis inside the Daily Plans. For example, TSLA 0.00%↑ thesis will be posted inside tomorrows plan.