Hello traders,
Hope you had a great weekend.
Last week, levels worked extremely well except one day where I missed shorting NQ by 2 points.
I will focus on missed trades in this newsletter going forward as I got a DM saying “boasting about your winners is not a good look chief”.
To which I replied “I’m not that kind of Indian” and then they blocked me.
Meanwhile we caught the dip on ES this evening with pocketing 6pt (4pt and 8pt)
Let us kick things off with earnings.
This week we have the big dogs AAPL and AMZN reporting.
I would be surprised if Apple beats this quarter.
Other than these, I would like to see some downside in ABNB.
I would send some more thoughts about the earnings through the week.
Crude:
As alluded to( I hate the word prediction as it implies certainty more than anything else) last week, Crude performed an inch perfect rally
For CL, we find ourselves at a fascinating crossroads. Last week's decisive close above the $80 mark isn't merely a statistical blip; it's a psychological milestone that resonates with those who manage substantial portfolios. These round numbers, like $80, aren't mere mathematical curiosities; they're part of the very fabric of market behavior (I used to think this is bogus snake-oil (snake oil get it!) but backtests on crude show significant reactions to round numbers, I guess money managers are superstitious).
Consider the recent surge: WTI is up by four and a half percent over the week and an astonishing 16 percent in a month. But let's not be dazzled by the immediate fireworks. The broader picture, one that stretches back to late November 2022, reveals a pattern of oscillation between the mid 80s and mid 60s, with a brief outlier in the end of Q123.
What's truly captivating here isn't just the numbers but the underlying momentum. As we approach the low 82s, the strength of this trend becomes more than a mere statistical phenomenon. It's a reflection of broader macroeconomic forces, the unending war and sanctions, a dance of supply and demand, geopolitics, and market psychology.
If this momentum continues higher and we close this week higher than last week then we can see another surge of another $6-$9 (possibly $10) within the next 45 trading days.
In the end, this isn't just a story about oil or even about markets. It's a narrative about fear of geopolitical risk and dare I say, Saudis wanting the oil higher (sorry MBS but I appreciate the hustle, paying Ronaldo & Benzema ain’t cheap).
Back to ES and NQ,
As this newsletter has been bullish since Feb and I will expect more of the same until proven wrong.
August has been historically weak month for $SPX but when we get a bullish 1H of the year, SPX has tanked only once!
That has been Black Monday of 1987. If you are someone who is averse to reading, you can watch the show linked below.
So until we see a retest of 4400s I will have no reason to be bearish.
Moving on,
Levels for this week: