Weekly Charts Reading for 12/26 - 12/29
Weekly Charts Reading for 12/26 - 12/29
Santa Rally?
How’s last week?
Two-directional market movement observed
Anticipated significant moves on Thursday and Friday, but the most substantial movement occurred on Wednesday
Wednesday's downward movement served as a cautionary signal for bulls
But, also acted as a marker indicating bullish support
Expected a combination of a shallower pullback and bulls pushing prices to a "safe distance," which is exactly what we observed
#ES achieved a new ATH, but #SPX has not yet reached a new ATH
#NQ maintained its position above the previous ATH
#YM showed upward movement, albeit not significantly
#RTY closed above the crucial 2040 level, bringing 2108/2169 into focus
#DXY continued its downward trajectory, pausing precisely near the support trend line from the lows of May 2021 & July 2023
All support levels identified last Sunday were precisely respected, even after Wednesday's rug pull, with weekly targets achieved.
Check out the four index futures charts with the same levels and ranges identified last Sunday, featuring new candle prints here on X (formerly Twitter)
Read here how I use this Weekly Newsletter in my daily trading
If you find my content valuable, please hit the like button on Substack and consider sharing the newsletter link on X. Your support through likes, restacks, shares, and reposts motivates me to continue publishing. Feel free to comment with specific questions and suggestions to enhance the usefulness for active traders.
Week Ahead (12/26 – 12/29)
Bullish bias maintained as support levels continue to hold for all indices
Caution added due to the rarity of 7-8 consecutive green weeks; a red week would provide bulls with a breather
Knowing that one day bulls will exhaust, is Wednesday's pullback potentially the first sign?
Prefers to see support failing before turning outright bearish, even in the likelihood of a pullback
Intra-day trading opportunities for both short and long positions expected during the upcoming week's light trading volume
January is historically a seasonally bearish month, typically starting after the first week
Bulls need to guard that momentum in the next few weeks after a good run
Normally, I pinpoint exact levels, but with the holidays, I went ahead and marked multiple levels (kind of like zones) above ATH. Not my usual style, not thrilled about it, but hey, better than skipping the newsletter.
Will we get a Santa Claus rally?
Checking the numbers for December: #ES up 4.98%, #NQ up 6.31%, #YM up 4.76%, and #RTY with a whopping 13.37% surge.
How much more do you think Santa's bringing?
If support levels identified holds, maybe an extra 0.5% - 1.25%?
Keep in mind, if there's a rally, it usually wraps up in the first couple of days of January.
Don’t forget to check out the link for detailed daily charts and levels.
Note about levels above ATH
Upside targets are estimated without left-side confirmation on the chart, utilizing a combination of Fibonacci and trend lines across multiple time frames. Feel free to reach out if these levels prove effective; otherwise, your understanding is appreciated.
These levels are subject to refinement as prices evolve throughout the days.
In the event of new highs, prioritizing profit-taking based on risk-to-reward multiples is recommended, rather than waiting for specific target levels to be reached.
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 is a short one with a holiday vibe, and the event calendar looks pretty chill with no major happenings
#ES_F / $SPX Futures:
📈 Weekly: Cautious 🐂 📊 Daily: Cautious 🐂
Analysis:
Fairly green week. The Friday afternoon flush is still holding support.
Even though #ES futures reached new ATH, the cash index SPX hasn't yet made a new ATH.
Bullish bias continues; however, caution is warranted until a close above 4831 is secured, as bearish doubts linger.
Bulls need to quickly claim 4808 before Tuesday's market open to instill confidence. Failure could lead to a retest of Friday's support levels at 4789/4784.
If the price fails to hold 4789/4784, dropping to 4770/4762 but recovers quickly to 4784 on the same day, it would keep the bulls in play.
Wednesday's swift flush and recovery indicate the low of Wednesday is a key level for bulls to hold and defend, prompting the adjustment of the orange flag level to 4745.
Interestingly, the prior week's prediction of a red day close below 4747 leading to more red days aligns with Wednesday's low at 4743 and a close above 4747. Coincidence?
Monthly Viewpoint:
🐂 Bullish Goal: 4770 (achieved)/ATH
🐻 Bearish Goal: To be decided upon observing a trend change on the daily
Weekly Perspective:
🐂 Bullish: If 4794/4784 holds and 4808 is reclaimed, 4857/4867+ is in play.
🐻 Bearish: If 4784 fails, 4762/4745- is in play.
Level by Level Bullish Play (on Daily):
If support at 4794/4784 holds and 4808 is reclaimed, 4822/4831 is next.
Upon successfully claiming the 4831 level, the next targets are 4837/4846.
A close above 4846 shifts focus to significant milestones of 4857/4867.
Level by Level Bearish Play (on Daily):
If 4784 fails, 4770/4762 is the target.
If 4762 fails, the next support levels are 4745/4737.
If 4745 fails, 4718/4700- becomes the downside target.
Zoomed-out View: As long as bulls hold 4794/4784 and reclaim 4831, 4857/4867+ is likely.
🔑 Key Levels:
Resistance: 4822/4831, 4837/4846, 4851/4857, 4867, 4886
Support: 4794, 4789/4784*, 4770/4762, 4745/4737, 4727/4718
Possible Trade Plans:
Long Trade:
If the market opens lower but holds 4795, consider going long with a stop loss below 4795 and targets at 4831 & 4837*.
If the market opens lower but holds 4789, consider going long with a stop loss below 4789 and targets at 4822, 4831, 4837, and 4846.
Wait for the market to claim 4831, look for signs 4822 is holding, and enter with a stop loss below 4822 and targets at 4837, 4846, and 4851.
Short Trades:
If the market opens up but fails to hold 4808/4811, consider shorting with a stop loss above 4811 and targets at 4795 and 4790.
If the market fails to hold 4784, bears reject the 4789 level, assess the setup and consider a short position with a stop loss just above 4789 and targets at 4770 and 4760.
Red Flags: Keep an eye out for potential signs of a bearish reversal on red days:
Orange Flag: A close below 4745 questions the daily uptrend.
1st Red Flag: A close below 4695 on a red day suggests the short-term weekly uptrend bias is in question.
2nd Red Flag: If the market closes below 4650 on a red day, it indicates potential voiding of the short-term weekly uptrend bias.
#NQ_F / #NDX Futures:
📈 Weekly: Cautious 🐂 📊 Daily: Cautious 🐂
Analysis:
Eight consecutive green weeks in a row.
With #NDX cash index marking a new high, the key level bulls must defend is 16755, prompting the upward adjustment of the orange flag.
#NASDAQ composite is yet to reach a new high.
As long as above 16790, bulls maintain control. Below 16730, bears gain confidence.
A red day close below 16575 signals a failing breakout.
Bulls ideally want to hold 16930/16890 to sustain momentum towards 17110/17205, pullback and then moving sideways above 16575 for a few weeks.
As mentioned last week, bulls need to move to a 'safe distance' to protect against an eventual deeper pullback. The mini rug pull on Wednesday demonstrated how the safe distance may work.
In any case, 16755 and 16575 are pivotal levels for bulls to defend the recent breakout.
If 16890 fails and the price drops to 16835 or 16790 but recovers quickly above 16890 on the same day, it signals the bulls are still in control, even if it means a significant move down and back.
Monthly Viewpoint:
🐂 Bullish target: 16355/16600 (already hit)
🐻 Bearish target: To be decided upon observing a trend change on the daily
Weekly Perspective:
🐂 Bullish: If 16930/16890 holds AND 17065 is reclaimed, 17205/17270- is in play.
🐻 Bearish: If 16890 fails, 16790/16730- is in play.
Level by Level Bullish Play (on Daily):
If 16930/16890 holds and 17065 is reclaimed, 17110/17132 is in play.
If 17132 is claimed, 17180/17205 is next.
If 17180 is claimed, 17245/17270 follows.
Level by Level Bearish Play (on Daily):
If 16890 fails, 16835/16790 is in play.
If 16790 fails, 16755/16730 is next.
If 16755 fails, 16670/16630- is the next target.
Zoomed-out View: As long as 16930/16890 holds, 17110/17270 is in play.
🔑 Key Levels:
Resistance: 17008, 17045/17065, 17110/17132, 17180/17205, 17245/17270
Support: 16865/16880, 16930, 16975, 17020, 17057*
Possible Trade Plans:
Long Trade:
Depending on the price before arriving at two key support levels, there could be multiple potential trade opportunities.
If the market opens down and shows signs of holding 16910 or 16890, go long once 16910 is claimed, with a stop loss below 16910 and targets at 17008, 17065, and 17110.
If the market opens down but holds 16930, go long around 16930 with a stop loss below 16930 and targets at 17008, 17065, and 17110.
Wait for 17065 to be claimed, look for signs of 17045 or 17008 holding, go long at 17045/17008 with a stop loss below these levels and targets at 17110, 17132, and 17150.
Short Trades:
After the market opens, if 16930 isn't tested yet and shows signs of rejection of 17008/17045 on a lower time frame, go short with a stop loss above 17008/17045 and targets at 16930 and 16910.
If the market holds 16930, hits 17008 but rejects it, and claims 16910 in a pullback on a lower time frame, go short around 16910 with a stop loss above 16910 and targets at 16835 and 16790.
If the market fails to hold 16890, on a lower time frame, look for a short entry around 16910 with a stop loss above and targets at 16835, 16790, and 16755.
Red Flags: Keep an eye out for potential signs of a bearish reversal on red days:
Orange Flag: A close below 16755 questions the daily uptrend.
1st Red Flag: A close below 16575 on a red day suggests the short-term weekly uptrend bias is in question.
2nd Red Flag: If the market closes below 16256 on a red day, it indicates potential voiding of the short-term weekly uptrend bias.
#YM_F / #DJI Futures:
📈 Weekly: Cautious 🐂 📊 Daily: Cautious 🐂
Analysis:
Another week, another ATH with a green close.
Friday's close doesn't appear convincingly bullish but is still holding support.
Hence, the bullish bias continues with caution.
Wednesday's strong pullback is a welcome action for bulls, providing them with an opportunity to take a breather without breaking the key support.
For down to sideways action, bulls ideally want to keep above 37190; otherwise, bears gain strength below that level.
This week, 37450 is the bull/bear line. Bullish above and bearish trades below 37450.
A drop below 37450, followed by a quick recovery above 37475 on the same day, will keep bulls still in play.
If 37450 fails on the daily, 36975 comes into focus.
Monthly Viewpoint:
🐂 Bullish target: ATH / 37900 (hit)
🐻 Bearish target: To be decided upon observing a trend change on the daily
Weekly Perspective:
🐂 Bullish: If 37680 holds and 38005 is reclaimed, 38260/38400 is in play.
🐻 Bearish: If 37680 fails, 37585/37475- is in play.
Level by Level Bullish Play (on Daily):
If 37680 holds, 37960/38005 is in play.
If 38005 is claimed, 38110 is next.
If 38110 is claimed, 38230/38260 follows.
Level by Level Bearish Play (on Daily):
If 37680 fails, 37585/37545 is in play.
If 37585 fails, 37475/37450 is next.
If 37475 fails, 37390/37310 follows.
Zoomed-out View: As long as 37910 holds, 38400 is in play.
🔑 Key Levels:
Resistance: 37880/37920, 37960/38005, 38110/38175, 38230/38260, 38355/38400
Support: 37680, 37585/37545, 37475/37450, 37390, 37310
Possible Trade Plans:
Long Trade:
Depending on where the price has been before arriving at three key support levels (37680, 37585, and 37475), there could be multiple potential long trade opportunities.
If 38005 is claimed, look for signs of 37960 holding on lower time frames and go long with a stop loss below 37960 and targets at 38110, 38175, and 38230.
Short Trades:
If 37960/38005 is rejected on a lower time frame and 37680 hasn't been tested, go short around 37960/38005 with a stop loss above 37960/38005 and targets at 37680 and 37585.
If 37680 fails, depending on the actual setup, go short near 37680 with a stop loss above 37680 and targets at 37585, 37475, and 37390.
Red Flags: Keep an eye out for potential signs of a bearish reversal on red days:
Orange Flag: A close below 37450 questions the daily uptrend.
1st Red Flag: A close below 36760 on a red day may suggest that the short-term weekly uptrend bias is in question.
2nd Red Flag: If the market closes below 36600 on a red day, it indicates potential voiding of the short-term weekly uptrend bias.
#RTY_F / #RUT Futures:
📈 Weekly: Cautious 🐂 📊 Daily: Cautious 🐂
Analysis:
As the week closed above 2040, attention shifts to 2089/2108.
Hence, maintaining a bullish bias.
Last week, bulls held the 2002 support for three consecutive days and moved up, indicating that bulls are still in control and likely to see the upward move continue.
We also observed last week's upside targets of 2040 & 2061 being achieved.
In case of a deeper pullback, bulls ideally want to keep the price above 1977/1970.
A weekly close above 2169 is key for any move to a new ATH.
Monthly Viewpoint:
🐂 Bullish target: 1903/1940 (hit)
🐻 Bearish target: To be decided upon observing a trend change on the daily
Weekly Perspective:
🐂 Bullish: If 2044/2030 holds and 2065 is reclaimed, 2094/2108 is in play.
🐻 Bearish: If 2030 fails, 2012/2000/1970- is in play.
Level by Level Bullish Play (on Daily):
If 2044/2030 holds and 2065 is claimed, 2089/2094 is in play.
If 2094 is claimed, 2108 is next.
If 2108 is claimed, 2120/2130 follows.
Level by Level Bearish Play (on Daily):
If 2030 fails, 2012 is in play.
If 2012 fails, 2000 is next.
If 2000 fails, 1977/1970 follows.
Zoomed-out View: As long as 2000 holds or is reclaimed, there's no reason 2108/2169 won't be tested.
🔑 Key Levels:
Resistance: 2065*/2072, 2089/2094*, 2108*, 2120, 2130/2138*
Support: 2044/2030, 2012, 2000/1993, 1977/1970, 1954
Possible Trade Plans:
Long Trade:
If signs of holding 2044 on a lower time frame are evident, go long with a stop loss below 2044 and targets at 2065, 2072, and 2089.
If 2065 is claimed, look for signs of holding 2050 on a lower time frame and go long with a stop loss below 2044 and targets at 2089 (first target) and 2094 (second target).
Short Trades:
If the price hasn't hit 2044 yet and signs of rejection at 2065/2072 are observed, enter a short position with a stop loss above 2065/2072, targeting 2044 and 2030.
If 2030 fails, depending on the actual setup, go short near 2030 with a stop loss above 2030 and targets at 2012 and 2000.
Red Flags: Keep an eye out for potential signs of a bearish reversal on red days:
Orange Flag: A close below 2000 questions the daily uptrend.
1st Red Flag: A close below 1970 on a red day may suggest that the short-term weekly uptrend bias is in question.
2nd Red Flag: If the market closes below 1905 on a red day, it indicates potential voiding of the short-term weekly uptrend bias.
#DXY / $USD:
📈 Weekly: Cautious 🐻 📊 Daily: Cautious 🐻
Analysis:
The red week continued, closing below the 101.960 and 101.740 targets, maintaining a bearish bias.
The price is near a support trendline connecting lows from March 2021 and July 2023, suggesting a potential bounce. Caution is advised.
As long as 102.470 or last week's highs are defended by bears (with no close above), the next targets are 101.030 and 100.550.
Note that the inverse correlation between USD and #NQ #ES may continue, potentially moving #NQ #ES further up.
🔑 Key Levels:
Resistance: 101.780/101.960, 102.470/102.635, 104.025*, 104.265, 104.560*
Support: 101.030, 100.550, 100.015, 99.750, 99.570
Green Flags: Keep an eye out for potential signs of a bullish reversal on green days:
Moving down flags aggressively for early warning of reversal
Lime Flag: A close above 102.635 on a green day could indicate that the daily downtrend bias is in question.
1st Green Flag: If the market closes above 102.900 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 104.025 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.
Wishing you a 🎄 Merry Christmas and ✨ Happy Holidays to make you a more profitable trader! 📈💰
Disclaimer: This is NOT financial advice. I am NOT a financial advisor.
Your NQ analysis is unparalleled. Hope you'll add CL in 2024 :) Thanks again for all you do!!