Hello traders,
Hope you had a great weekend(I’m still reeling from mine)
Last Friday, the market did a complete 180, with equities getting hammered in the final stretch of the day. The week closed at a low, a real punch in the gut for the bulls. Look at the numbers: SPX down 2.27%, NQ down 3.02%, and DJIA down 1.11% for the week. Powell's interest rate hike and the big earnings plays winding down are part of the story here.
But let's not lose perspective. Corrections in bull markets? They're like a flash storm – intense but quick. And don't forget, the $SPX was up a whopping 19% in the first half of the year. This is a bull market with legs, and history tells us a minor pullback is just part of the game.
This was mentioned in last week’s plan and shouldn’t have come as a surprise to readers.
Weekly Plan 7/31
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”.
The data doesn't lie. Historically, the lows between now and year-end tend to hit in August. So don't be caught off guard if the next week or two marks the low for the month, followed by a bit of a sideways shuffle before we climb again.
Here's the kicker: historical trends suggest we'll close out on Dec 30, 2023, around 8-10% higher than the SPX's June 30, 2023 close. So keep your eyes on the prize and don't get lost in the noise. This market's got more to give.
CL's trajectory is a testament to the nonlinearity of markets. Another week, another data point, yet the system remains robust. The SPR, at a 40-year nadir, reminds us of the cyclical nature of things; energy is once again in the limelight. With CL's recent 2.78% ascent, now flirting with the low $80s, we're reminded of the fragility of past highs from November 2022.
Yet, as with all complex systems, there's an element of randomness: the impending hurricane season, spanning from mid-August to mid-October. Its apex around September 10th introduces a layer of uncertainty, a potential Black Swan, that could disrupt refiners and amplify price volatility. Given the unprecedented water temperatures in the Gulf of Mexico and adjacent to Florida, we're navigating a landscape of unknown risks. Stay skeptical, be antifragile; this sector's narrative is far from complete
Let's connect the dots between crude prices and this week's CPI readings. If oil keeps its rally game strong, we could see a bump in core CPI. Don't be shocked if ES takes a dip, dropping anywhere from 50 to 100 points
Weekly Levels: