Weekly Charts Reading for 11/27 - 12/01
Bovine Break?
How’s last week?
Anticipated bullish momentum last week, which materialized despite the short trading week.
#ES, #NQ, and #YM hit weekly targets of 4580, 16130, and nearly 35455 respectively.
#RTY lagged and consolidated but maintained key support.
As expected, #DXY bears held their ground at 104.025, closing the week in the red.
Check X (formerly Twitter) thread for before-and-after charts and analysis on how last week's levels performed.
Read here how I use this Weekly Newsletter in my daily trading
I am curious about your trading experiences. Share your trading moves inspired by this newsletter – the wins, the almost-wins, and the lessons learned or what you would like to cover more or less. Drop your insights in the comments below or over on X (formerly Twitter). Let's learn and grow together!
Week Ahead (11/27 – 12/01)
Friday's bullish resolve may carry over on Sun/Mon, holding key support levels.
Expecting month-end adjustments, potentially leading to multiple red days, with JPowell's Friday speech possibly initiating a December in red.
Rather than predicting market lows, prefer a level-by-level approach.
Expect heightened volatility due to the events calendar and month-end adjustments.
While a pullback is likely, waiting for support failure before turning outright bearish.
Intraday opportunities for short positions can still be considered.
Factors favoring bears:
Geopolitical conflicts and macro conditions.
#NQ, after hitting 16130, displays slight weakness despite holding support.
Most indices near weekly/monthly resistance levels.
End of month candles will be printed.
FOMC members speaking throughout the week.
Factors favoring bulls:
Despite #NQ softness, other indices show continued bullish strength.
#DXY weakness could result in upside moves in #ES and #NQ.
After six days of sideways movement, #RTY may be inclined to move upward.
Note: My expertise doesn't extend to geopolitics or macro / micro economic analysis. Therefore, I categorize geopolitical conflicts and macroeconomic conditions as factors that favor the bears, as they often introduce uncertainty and challenges to the market.
Feel free to scroll down to the end of the report to get a rundown on some of the terms I'm throwing around, like "hold," "claim," and “fail”
Disclaimer: This is NOT financial advice. I am NOT a financial advisor.
Events Calendar:
Next week's calendar is busy with multiple FOMC members speaking, notably Waller on Tuesday and JPowell on Friday. Economic reports throughout the week provide ample reasons for potential market volatility
#ES_F / $SPX Futures: Near the fence
📈 Weekly: cautious🐂 📊 Daily: Cautious 🐂
Analysis:
Bulls maintained control throughout the previous shortened week, marking the fourth consecutive green week. The market successfully held the crucial 4520 support and moved approximately 60 points, achieving both weekly and monthly targets.
While the current focus is on the pivotal 4556 level for bulls and bears, there's a likelihood that a drop to 4548/4544, followed by a swift recovery above 4562, could keep the bullish momentum intact. Friday's defense of 4262 suggests another attempt to claim 4572 is probable.
A decisive move above 4572 is vital for the bulls, paving the way for further gains to 4592/4603. As long as the support at 4520 holds, a test of 4621 seems likely.
Given the end of the month next week, a long-anticipated pullback is likely.
The question lies in whether the pullback occurs after reaching 4603/4608 or before. If Friday's bullish trend persists, we may witness 4603/4608 before the end-of-month pullback.
A close below 4544 signals more red days.
Monthly Viewpoint:
🐂 Bullish Goal: 4515/4562 (achieved)
🐻 Bearish Goal: To be determined based on daily trend changes
Weekly Perspective:
🐂 Bullish: If 4562/4556 holds, 4608/4621+ is in play
🐻 Bearish: If 4556 fails, 4544/4530 are the next support/targets.
Level by Level Bullish Play (on Daily):
If the support at 4562/4556 holds/reclaimed, 4585/4592 is the next target.
Upon claiming 4592, the focus shifts to 4603/4608.
A close above 4603 sets sights on the significant milestone of 4621/4636.
Level by Level Bearish Play (on Daily):
If 4556 fails to hold, 4548/4544 becomes the target.
If 4544 fails, the next support levels are 4530/4520.
A break below 4520 brings 4511/4502 into focus.
Zoomed-out View: As long as bulls hold 4520, the path to 4621/4667 remains open. However, a red day closing below 4544 would negate last week's bullish move.
🔑Key Levels:
Resistance: 4572, 4585/4592, 4603/4608*, 4621*, 4636
Support: 4562/4556, 4544*, 4530/4520*, 4511, 4502*
Possible Trade Plans:
Considering the above analysis and key levels, here are some potential trade plans:
Long Trade:
If the market opens lower but holds 4562, consider a long position with a stop loss below 4562. Targets: 4572, 4585, 4592.
If the market opens lower but holds 4556, consider a long position with a stop loss below 4556. Targets: 4572, 4592.
Wait for the market to claim 4572, observe signs of 4562 holding, and enter a long position with a stop loss below 4562. Targets: 4592, 4603.
If the market hasn't reached 4603 and shows signs of 4544 support holding, consider a long position at 4544 with a stop loss below 4544. Targets: 4562, 4585, 4603.
Short Trades:
If the market opens up but fails to hold 4572/4585, look for signs of rejection and consider a short position with a stop loss above 4572/4585. Targets: 4562, 4556, 4544.
If the market fails to hold 4556, bears reject the 4562 level, consider a short position with a stop loss just above 4562. Targets: 4548/4544.
Note: These examples illustrate my approach to the levels. Variations may occur based on actual entry and market conditions.
Red Flags: Keep an eye out for potential signs of a bearish reversal on red days.
As the market moves up, adjust flag levels for early detection of a short-term trend change.
Orange Flag: A close below 4544 questions the daily uptrend.
1st Red Flag: A close below 4520 on a red day suggests a potential shift in the short-term weekly uptrend bias.
2nd Red Flag: If the market closes below 4407 on a red day, it indicates a potential voiding of the short-term weekly uptrend bias.
#NQ_F / #NDX Futures: Is it time for pullback?
📈 Weekly: Cautious 🐻 📊 Daily: Cautious 🐂
Analysis:
The end of the month approaching increases the likelihood of a pullback. Consequently, the weekly bias shifts to cautiously bearish, while maintaining a cautious bullish stance on the daily until a support level as identified below is breached.
Bulls appear somewhat vulnerable below 16095, introducing caution to the bullish bias. Two potential scenarios for the impending pullback:
Bulls hold 15885/15940 early in the week, making a move to test 16250/16270 and experiencing a deeper pullback for the remainder of the week.
Bears persist in holding 16072/16095, pushing the market down to 15890/15835.
Despite a bullish week close, Friday's close lacked strong bullish conviction.
The majority of last week's movement occurred within the 15890-16090 range, with a significant directional move anticipated upon the breach of either level by bulls or bears.
If Friday's weakness extends into the new week, key levels for bulls to defend are 15885/15940.
A potential breakdown below 15940 might lead to a sharper pullback to 15890/15835, signaling bearish strength. However, a swift recovery on the same day would nullify the breakdown (failed breakdown).
It's crucial to remain alert as the market has ways to surprise.
Monthly:
🐂 Bullish target: 16065/16130 (achieved)
🐻 Bearish target: To be determined based on daily trend changes
Weekly Play:
🐂 Bullish: If 15985/15940 holds AND 16095 is reclaimed, 16196/16270+ is in play.
🐻 Bearish: If 15940 fails, 15835/15680- is in play.
Level by Level Bullish Play (on Daily):
If 15985/15940 holds or is reclaimed, 16072/16095 is in play.
Once 16095 is claimed, 16130/16196 becomes the next focus.
If 16130 is claimed, 16270 is the subsequent target.
Level by Level Bearish Play (on Daily):
If 15940 fails, 15890/15835 is in play.
A break below 15835 leads to 15720/15680.
If 15680 is breached, 15590 is the next downside target.
Zoomed-out View: As long as 15835 holds or is reclaimed, 16270+ remains in play.
🔑 Key Levels:
Resistance: 16035, 16072/16095, 16130*, 16196, 16270*
Support: 15985/15940, 15890, 15835*, 15790, 15720/15680*
Possible Trade Plans:
Long Trade:
Depending on the price before reaching key support levels (15985, 15940, 15890), there could be multiple potential trade opportunities.
If the market hasn't hit 16270 and reclaims 16095, look for signs of holding 16095 and go long with a stop loss below 16095, targeting 16196 and 16270.
Short Trade:
If the market opens higher or lower (but 15985 isn't tested), look for signs of rejection of 16035/16072 and go short with a stop loss above 16035/16072, targeting 15985 and 15940.
If the market holds 15985, hits 16095 but rejects it and claims 16072 in a pullback, go short around 16090 with a stop loss above 16090, targeting 15985 and 15940.
If the market hits 16270, look for signs of rejection and go short with a stop loss above 16270, targeting 16196 and 16130.
These are examples to illustrate my approach to the levels; adjustments may occur based on real-time price action dynamics.
Red Flags:
Keep an eye out for potential signs of a bearish reversal on red days:
As the market moved up, adjusted flag levels aggressively for early detection of a short-term trend change.
Orange Flag: A close below 15940 questions the daily uptrend.
1st Red Flag: A close below 15835 on a red day may suggest a potential shift in the short-term weekly uptrend bias.
2nd Red Flag: If the market closes below 15550 on a red day, it indicates a potential voiding of the short-term weekly uptrend bias.
#YM_F / #DJI Futures: Near key resistance
📈 Weekly: Cautious 🐂 📊 Daily: Cautious 🐂
Analysis:
Yet another robust bullish weekly close, with Friday's closure maintaining strength. The market is now approaching the 35455 resistance, coupled with the end of the month next week, prompting a cautious approach to bullish plays. This caution implies a potential for quicker profit-taking on long trades.
Despite the caution, based on last week's close, as long as 35370/35325 holds, the level of 35650 remains in play.
The key for bulls is to promptly claim 35455/35495 and hold 35280 in a pullback or at 35120 in a deeper pullback.
As long as the price remains above 35280, bulls are in control, while a breach below 35120 suggests increasing bearish strength.
The orange flag has been moved to 35280, indicating that a red day closing below this level could signal the potential for more red days.
Bullish momentum may be fading, but the bullish bias persists.
A weekly close above 35455 is crucial for bulls to sustain momentum above July's highs in the coming weeks.
Monthly:
🐂Bullish target: 35455 (approaching)
🐻Bearish target: To be determined based on daily trend changes
Weekly Play:
🐂 Bullish: If 35370/35325 holds or is reclaimed, 35650+ is in play.
🐻Bearish: If 35280 fails, 35180/35120- is in play.
Level by Level Bullish Play (on Daily):
If 35370/35325 holds, 35455/35495 is in play.
Once 35455 is claimed, the focus shifts to 35570.
If 35570 is claimed, 35650/35710 becomes the next target.
Level by Level Bearish Play (on Daily):
If 35280 fails, 35180/35120 is in play.
A break below 35120 leads to 35055/34960.
If 34960 is breached, 34820/34756 is the next downside target.
Zoomed-out View: As long as 35280 holds or is reclaimed, 35455/35650+ remains in play.
🔑 Key Levels:
Resistance: 35455/35495*, 35570, 35650*, 35710, 35762
Support: 35370/35325, 35280*, 35180/35120, 35055, 34960*
Possible Trade Plans:
Long Trade:
Depending on where the price has been before reaching the three key support levels (35370, 35325, and 35280), there could be multiple potential long trade opportunities.
If the market hasn't hit 35650 and reclaims 35455, look for signs of holding 35370 and go long with a stop loss below 35370, targeting 35495, 35570, and 35650.
Short Trade:
If 35455 is rejected on a smaller time frame and 35370 hasn't been tested, go short around 35455 with a stop loss above 35455 and targets at 35370, 35325, and 35280.
If 35280 fails, depending on the actual setup, go short near 35325 with a stop loss above 35325 and targets at 35225, 35180, and 35120.
Red Flags: Keep an eye out for potential signs of a bearish reversal on red days:
As the market moved up, flag levels were adjusted aggressively for early detection of a short-term trend change.
Orange Flag: A close below 35280 questions the daily uptrend.
1st Red Flag: A close below 34960 on a red day may suggest that the short-term weekly uptrend bias is in question.
2nd Red Flag: If the market closes below 34695 on a red day, it indicates a potential voiding of the short-term weekly uptrend bias.
#RTY_F / #RUT Futures: Ready to resume?
📈 Weekly: Cautious 🐂 📊 Daily: Cautious 🐂
Analysis:
Bulls are steadfastly holding key support, as evidenced by the market spending the last six trading days within the 1780-1815 range.
The bigger directional move is anticipated once either bulls or bears claim one of these two levels.
With the end of the month approaching next week, the likelihood of some red days is acknowledged, particularly in the second half of the week.
As long as the identified supports are maintained, bulls should remain in a secure position.
A level to watch is a close above 1827, which is key to any upside continuation, targeting 1872/1924+.
The immediate hurdle for bulls is to overcome 1815, and they need to claim 1815/1818.5 to gain momentum.
Conversely, bears need to breach 1780 to gain downside momentum.
Monthly:
🐂Bullish target: 1865/1872
🐻Bearish target: 1686/1665
Weekly Play:
🐂Bullish: If 1806.5 or 1799 holds or is reclaimed, 1838/1848 is in play.
🐻Bearish: If 1799 fails, 1789/1780- is in play.
Level by Level Bullish Play (on Daily):
If 1806.5/1799 holds, 1815/1818.5 is in play.
Once 1818.5 is claimed, the focus shifts to 1827/1838.
If 1827 is claimed, 1848/1865 becomes the next target.
Level by Level Bearish Play (on Daily):
If 1799 fails, 1789/1780 is in play.
A break below 1780 leads to 1770/1762.
If 1770 fails, 1747/1734 becomes the next downside target.
Zoomed-out View: As long as 1747 or 1734 holds, 1872/1922 is likely to be tested.
🔑 Key Levels:
Resistance: 1815/1818.5*, 1827, 1838, 1848*, 1865
Support: 1806.5/1799, 1790/1783, 1770/1762, 1747, 1734
Possible Trade Plans:
Long Trade:
If signs of holding 1806.5 on a lower time frame are observed, go long with a stop loss below 1806.5 and 1815 as the first target.
If signs of holding 1799 on a lower time frame are evident, go long with a stop loss below 1799 and target 1815 first, followed by 1818.5.
If 1815 is claimed, look for signs of holding 1806.5 on a lower time frame and go long with a stop loss below 1806.5. Targets: 1818.5, 1827.
Short Trade:
If the price hasn't hit 1799 yet and signs of 1815/1818.5 rejection are observed, enter a short position with a stop loss above 1815/1818.5 and targets at 1799, 1783.
If 1799 fails, depending on the actual setup, go short near 1806.5 with a stop loss above 1806.5. Targets: 1789, 1780.
Red Flags:
Keep an eye out for potential signs of a bearish reversal on red days:
Moved the orange flag level to 1780 from 1770 for the early detection of a short-term trend change.
Orange Flag: A close below 1780 questions the daily uptrend.
1st Red Flag: A close below 1734 on a red day may suggest that the short-term weekly uptrend bias is in question.
2nd Red Flag: If the market closes below 1707 on a red day, it indicates a potential voiding of the short-term weekly uptrend bias.
#DXY / $USD: Why pause now?
📈 Weekly: 🐻 📊Daily: Cautious 🐻
Analysis:
As anticipated, following the triggering of the 2nd red flag in the week before last, the US Dollar Index ($USD) continued its downward trajectory. Bears successfully defended the level of 104.025 (with a high at 104.213) on the daily chart and sustained the downward movement on Thursday and Friday.
However, the push down on Friday lacked the expected momentum.
That downside momentum may come after a quick back test of 103.615/103.740 following a move starting on Sunday or Monday.
Caution is now added for two primary reasons: 1) the absence of anticipated downside momentum on Friday and 2) the approaching end of the month next week.
As long as 103.615/103.740 holds in any retest bounce, the next target is 103.010/102.810. Above 103.740, bears might start getting nervous.
It's essential to note the continuing inverse correlation between USD and #NQ #ES. If #DXY continues to move down early in the week, #ES & #NQ may attempt to move up before potentially reversing for the week.
🔑 Key Levels:
Resistance: 103.615/103.740, 103.920/104.025*, 104.420, 104.560*, 105.735*
Support: 103.010*, 102.810, 102.295, 101.960*
Green Flags: Keep an eye out for potential signs of a bullish reversal on green days:
Lime Flag: A close above 104.560 on a green day could indicate that the daily downtrend bias is in question.
1st Green Flag: If the market closes above 105.735 on a green day, it may suggest that the short-term weekly downtrend bias is in question.
2nd Green Flag: A significant bullish confirmation could occur if the market closes above 106.010 on a green day, potentially voiding the short-term weekly downtrend bias.
Note about Terminology:
In my weekly reports and X (Twitter) posts, I often refer to terms like "must hold," "claim," or "fail." Here's a quick explanation of what these terms mean:
For intraday analysis: I consider the 15-minute or 1-hour candle close.
For trades spanning overnight to two days: I focus on the 4-hour candle close.
For a weekly or longer-term outlook: I rely on the daily candle close.
close above: claimed / close below: failed
These references are also available in the pinned thread on my X profile. I strongly recommend reading that thread for a deeper understanding of my chart analysis. While I plan to elaborate on my methodology in a separate Substack post in the future, the pinned thread on my X profile offers valuable insights for now.
Curious about your trading experiences. Share your trading moves inspired by this newsletter – the wins, the almost-wins, and the lessons learned. Drop your insights in the comments below or over on X (formerly Twitter). Let's learn and grow together!
Be nimble and adjust your strategies according to market conditions and the mentioned support and resistance levels. Monitor flag levels for early signs of bias shifts. If you're not following me on X @trdnvestor , consider doing so for daily updates.
Let this week bring you more opportunities to profit!
Disclaimer: This is NOT financial advice. I am NOT a financial advisor.
Fixed typo (carry over from last week's newsletter :) in #YM Level by Level Bullish Play (on Daily).
Changed :
If 34950/34895 holds, 35455/35495 is in play.
to
If 35370/35325 holds, 35455/35495 is in play.
Since 35370/35325 were support this week.