Weekly Charts Reading for 1/8 - 1/12
Weekly Charts Reading for 1/8 - 1/12
CareBear or CheerBear?
How’s last week?
Bears entered the market as anticipated.
A notable downward movement occurred.
#SPX triggered the first red flag but maintained support at 4700 on Friday, representing a 2.87% decline from its recent high.
#NQ triggered the second red flag but held crucial support at 16450 on Friday, marking a 4.84% decrease from its recent high.
#YM experienced a red week, though the decline was less pronounced compared to other indices, standing at 1.59% down from its recent high.
#RTY lost support and experienced a swift decline below the second red flag, resulting in a 7.55% decrease from its recent high.
#DXY shifted to a positive stance after closing above the lime flag on Tuesday.
Due to upcoming extensive travel and other commitments, I won't be able to publish weekly chart reading reports until March. My availability on X (formerly Twitter) will also be limited during this time.
During this break, I plan to recharge, refocus, and work on making this newsletter more useful and actionable for you.
I appreciate your understanding and continued support.
Wishing you all the success in your trading and investing journey!
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Week Ahead (1/8 – 1/12)
No Santa Rally
All indices recorded strong red weekly closes, except for #YM.
Consequently, the bias has shifted to bearish.
There is a possibility that #DXY may retreat; in such a scenario, equities could experience an upward lift.
While the bulls managed to hold support, a strong commitment is yet to be observed.
A potential shift to a bullish bias could occur if the bulls close the day in the green above the identified key levels in the respective index analyses.
However, until those levels are convincingly claimed, a cautious bearish bias is being maintained.
Upon successfully claiming the key levels, the bulls may gain strength.
It is important to note that if the bulls fail to claim these key levels, the bears may press down button of the elevator quickly.
The trade plan theme for the week suggests that intra-day long positions may work for #ES, #NQ, and #RTY. For swing long plays, it is advisable to wait for a day close above 1657 for #ES, 16580 for #NQ, and 1991 for #RTY. For those willing to take risks, swing long positions can be considered as long as the mentioned supports hold. For short trades, if these key levels, especially on a daily basis, are rejected, better opportunities may arise for bears.
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:
While a couple of FOMC members are scheduled to speak from Monday to Wednesday, the real focus lies on high-impact economic reports such as core CPI, Unemployment claims, and core PPI set to be released on Thursday and Friday. Anticipate increased volatility during these latter days of the week
#ES_F / $SPX Futures:
📈 Weekly: Cautious Bears 🐻 📊 Daily: Cautious Bulls 🐂
Analysis:
As expected, bears entered at the right level.
Bulls failed to reach new all-time highs.
The 4797 support failed, and bears controlled the entire week.
The week closed strongly red, near support, prompting a shift in the weekly bias to bearish.
Every rally attempt was quickly sold, including Friday morning's rally.
However, support from Dec 13th post FOMC has been maintained, keeping the daily bias cautiously bullish.
Caution is added to the daily bias due to the weekly close indicating that bears may not be done yet.
Weekly caution persists as Friday held 4700, and the 2nd red flag hasn't been triggered yet.
Thursday's close triggered the 1st red flag, making 4769 & 4773 crucial levels for bulls to claim.
Closing above these levels will alleviate bearish pressure, indicating a reduced likelihood of selling off rallies.
If the bulls successfully close the day above 4790, more dips are likely to be bought
However, in the event of rejection at the 4769/4773 levels on a daily basis, the likely target becomes 4660/4650.
In summary, as long as the day doesn't close above 4773 or at least 4769, the targets of 4660/4650 remain in play.
A drop to 4695 followed by a quick recovery above 4718 on the same day will keep the bulls in play, potentially facilitating a back test of 4769/4773 (if these levels have not already been tested).
Conversely, a spike over 4773/4778 followed by a rapid drop below 4667 would keep the bears in play, targeting 4674/4660.
Reiterating key points from last week for a broader perspective:
As long as 4603 or 4548 holds, the uptrend from the last quarter remains intact.
A failure of 4548 is only considered if the weekly close falls below 4558.
However, bears gain significant confidence if there is a daily close below 4603.
Yearly View:
🐂 Bullish: As long 4420/4350 holds, 5615/6110+ is in focus.
🐻 Bearish: Will determine when monthly trend turns bearish.
Monthly Viewpoint:
🐂 Bullish Goal: As long as 4603/4548 holds/reclaimed, 5256 is in focus.
🐻 Bearish Goal: If bears hold 4797 or 4790, 4603/4548 is possible.
Weekly Perspective:
🐂 Bullish: If 4728/4720 holds, 4769/4890/4797 is in play.
🐻 Bearish: If 4708 fails, 4695/4660/4635- is in play.
Level by Level Bullish Play (on Daily):
If the support at 4720 holds, 4757/4769 is next.
Upon claiming 4769, the focus shifts to 4778/4790.
A close above 4790 shifts focus to 4818/4828.
Level by Level Bearish Play (on Daily):
If 4708 fails to hold, 4700/4695 would be the target.
If 4695 fails, the next support levels are 4660/4650.
If 4650 fails, 4635/4610- becomes the downside targets.
Zoomed-out View:
Same as last week.
🐂 Bullish: As long as 4750/4740 holds or reclaimed, 5000/5025 is in play.
🐻 Bearish: If bears hold 4835 and 4740 fails to hold, 4660/4603 is in play.
🔑 Key Levels:
Resistance: 4750/4757, 4769, 4773/4780, 4792, 4808
Support: 4728/4720, 4708, 4700/4695, 4680, 4660/4650
Possible Trade Plans:
Long Trade:
Look for opportunities to go long near 4728 with 4745 & 4757 targets.
If 4757 is claimed, go long with 4769 & 4773 targets.
If 4708 holds, go long with 4720 as the target.
If 4695 holds, go long with 4708, 4720 & 4727 as targets.
Short Trades:
If price moves up, look for shorting opportunities at 4747, 4757, 4769/4773 for better risk to reward.
If 4708 fails to hold, go short with 4695, 4678 & 4660 as targets.
If 4720 fails, go short around 4720-4723 with 4708, 4700, and 4695 as targets.
Red Flags:
Orange Flag: A close below 4797 questions the daily uptrend (hit 2nd January).
1st Red Flag: A close below 4745 on a red day suggests the short-term weekly uptrend bias is in question (hit 4th January).
2nd Red Flag: A close below 4650 on a red day indicates the potential voiding of the short-term weekly uptrend bias.
#NQ_F / #NDX Futures:
📈 Weekly: Cautious Bears 🐻 📊 Daily: Cautious Bulls 🐂
Analysis:
Finally, bears made their move, pushing the market down by about 5% from the recent all-time high.
Due to the strength of the red week, the weekly bias is changed to bearish.
Despite this, the key support at 16450 held, maintaining the daily bias as cautiously bullish.
Caution is added to the daily bullish bias because the 2nd red flag was triggered on Wednesday after failing to hold 16575.
Bearish pressure persists until a close above 16740, but the intensity may decrease if a green day closes above 16580.
The actions of the last week have noticeably slowed down the bullish momentum.
Ideally, bulls would like to establish a base. As long as the market stays above 16425, the bulls remain hopeful, while below 16425, bears gain confidence.
If the price spikes to 16630 but rejects and falls below 16580 quickly on the same day, it's a sign that bears are still in control.
Yearly View:
🐂 Bullish: As long as 14265/14140 holds, 20320/22640 is in play.
🐻 Bearish: Will determine when the monthly trend turns bearish.
Monthly Viewpoint:
🐂 Bullish Goal: As long as 15955/15465 holds, 19035/19710/20190 is in play.
🐻 Bearish Goal: As long as 17040 holds, 16020/15955/15465 is likely.
Weekly Perspective:
🐂 Bullish: If 16425 holds, 16580/16740/16878 is in play.
🐻 Bearish: If 16395 fails, 16256/16100- is in play.
Level by Level Bullish Play (on Daily):
If 16425 holds and 16520 is reclaimed, 16580/16630 is in play.
Once 16580 is claimed, 16735/16750 is the next target.
If 16740 is claimed, 16878/16970 is the next focus.
Level by Level Bearish Play (on Daily):
If 16395 fails, 16355/16300 is in play.
If 16300 fails, 16256/16205 is in play.
If 16256 fails, 16145/16100 is next.
Zoomed-out View:
Bullish: As long as 16425/16395 holds, 16740/17040+ is in play.
Bearish: If bears hold 16580 or 16740 and 16355 fails to hold, 16256/16020 is in play.
🔑 Key Levels:
Resistance: 16520, 16580, 16630, 16740, 16878, 17040
Support: 16425/16395, 16355*, 16300, 16256*, 16100, 16020*
Possible Trade Plans:
Long Trade:
If signs of holding 16450/16425, go long with 16520, 16580, 16630 as targets.
Once 16520 is claimed, go long with 16580, 16630, and 16665 as targets.
If 16355 holds & 16395 is claimed, go long with 16520, 16580, 16630 as targets.
Short Trade:
After the market opens up and if 16425 isn't yet tested, look for signs of rejection of 16520 on a lower time frame and go short with a stop loss above 16520 and 16425 & 16395 targets.
If the market fails to hold 16395, on a lower time frame, look for a short entry around 16400 with a stop loss above, and 16400, 16355, and 16300 as targets.
Green Flags:
Lime Flag: A close above 16580 questions the daily downtrend.
1st Green Flag: A close above 16740 on a green day may suggest that the short-term weekly downtrend bias is in question.
2nd Green Flag: If the market closes above 17040 on a green day, indicating potential voiding of the short-term weekly downtrend bias.
#YM_F / #DJI Futures:
📈 Weekly: Cautious Bears 🐻 📊 Daily: Cautious Bulls 🐂
Analysis:
After precisely hitting 38110 (38113 - new ATH), bears took control.
Tuesday's close triggered the orange flag.
The market is working on retracing back almost to the start of the move that took the price to the new ATH.
Bulls remain weak until 37905 is claimed; until then, a retest of 37465 is a possibility.
The key level for the week is 37585; bullish above and bearish trades below this level.
A drop below 37585 to 37465 and a quick recovery above 37585 or at least 37545 on the same day will keep the bulls still in play.
Yearly View:
🐂 Bullish: As long as 35315/33915 holds, 41900/45030+ is in play.
🐻 Bearish: Will determine when the monthly trend turns bearish.
Monthly Viewpoint:
🐂 Bullish Target: As long as 36750/36602 holds, 39210/41310+ is in play.
🐻 Bearish Target: Will determine when the weekly trend turns bearish.
Weekly Perspective:
🐂 Bullish: If 37686 holds and 37830 is reclaimed, 38040/38175+ is in play.
🐻 Bearish: If 37585 fails, 37465/37390- is in play.
Level by Level Bullish Play (on Daily):
If 37686 holds, 37775/37830 is in play.
If 37830 is claimed, 37905/38015 is next.
If 37905 is claimed, 38040/38110 is next.
Level by Level Bearish Play (on Daily):
If 37585 fails, 37465 is in play.
If 37465 fails, 37390/37305 is next.
If 37390 fails, 37190/37050 is next.
Zoomed-out View:
Bullish: As long as 37465/37390 holds or is reclaimed, 38400 is in play.
Bearish: If bears hold 38030 and 37818 fails to hold, 37465/37390/36975 is in play.
🔑 Key Levels:
Resistance: 37775, 37830, 37905, 38015/38040, 38110, 38175
Support: 37686, 37585/37545, 37465, 37390, 37305, 37190
Possible Trade Plans:
Long Trade:
If there are signs of 37686 holding, go long with 37775, 37830, and 37905 as targets.
If 37905 is claimed, look for signs of 37830 holding on lower time frames and go long with a stop loss below 37830 and 38015, 38040, and 38110 as targets.
Short Trade:
If 37830 is rejected on a lower time frame and 37686 is claimed, go short around 37686 with a stop loss above 37686 and 37585 and 37545 as targets.
If 37585 fails, depending on the actual setup, go short near 37585 with a stop loss above 37585 & 37545, 37465, and 37390 as targets.
Red Flags:
Orange Flag: A close below 37818 questions the daily uptrend (triggered on Jan 3rd).
1st Red Flag: A close below 37390 on a red day may suggest that the short-term weekly uptrend bias is in question.
2nd Red Flag: If the market closes below 36760 on a red day, indicating the potential voiding of the short-term weekly uptrend bias.
#RTY_F / #RUT Futures:
📈 Weekly: Cautious Bears 🐻 📊 Daily: Cautious Bulls 🐂
Analysis:
Last week had little hope for a bullish move after December's rejection of 2094.
Bears wasted no time on the first trading day of the New Year and closed below 2042, triggering the Orange flag and essentially changing the bias to cautiously bearish.
However, Wednesday's price action was all about bears triggering the 1st Red flag.
Friday's close triggered the 2nd Red flag, although the close was very near to the 1970 flag level (1969 actual close).
Hence, changing the weekly bias to bearish.
Until a green day closes above 1991, 1905 & 1880 remain in play.
Yearly View:
🐂 Bullish: As long as 1867 holds, 2047/2461/2575+ is in play.
🐻 Bearish: Will determine when the monthly trend turns bearish.
Monthly Viewpoint:
🐂 Bullish: As long as 1994/1970 holds, 2052/2461+ is in play.
🐻 Bearish: As long as 2038/2048 holds, 1905/1880 is likely.
Weekly Perspective:
🐂 Bullish: If 1962/1957 holds and 1991 is reclaimed, 2038/2048 is in play.
🐻 Bearish: If 1957 fails, 1925/1905/1887- is in play.
Level by Level Bullish Play (on Daily):
If 1962/1957 holds & 1977 is claimed, 1986/1991 is in play.
Once 1991 is claimed, 2015/2038 is next.
If 2038 is claimed, 2048/2062 is next.
Level by Level Bearish Play (on Daily):
If 1957 fails, 1948/1925 is in play.
If 1925 fails, 1905 is next.
If 1905 fails, 1887/1880 is next.
Zoomed-out View:
Bullish: If 1991 is reclaimed, 2038/2062 is in focus.
Bearish: If bears hold 2038/2048, 1905/1880 is in play unless it's already been tested.
🔑 Key Levels:
Resistance: 1977, 1986/1991*, 2015, 2038*, 2048, 2062, 2086.5
Support: 1962/1957*, 1948, 1925/1922, 1905*, 1887/1880*
Possible Trade Plans:
Long Trade:
If signs of holding 1962 on a lower time frame, go long with a stop loss below 1962 and 1977, 1986, and 1991 as targets.
If 1991 is claimed, look for signs of holding 1986/1977 on a lower time frame and go long with 2015, 2038, and 2048 as targets.
Short Trade:
If 1957 fails, depending on the actual setup, go short near 1962 with a stop loss above 1962 and 1925, 1905 & 1896 as targets.
If 1977 is rejected and 1962 is claimed, go short around 1962 with 1948, 1925, and 1905 as targets.
If 1986/1991 is rejected, look for a setup to go short with 1962, 1957, and 1948 as targets.
Green Flags:
Lime Flag: A close above 1991 questions the daily downtrend.
1st Green Flag: A close above 2038 on a green day may suggest that the short-term weekly downtrend bias is in question.
2nd Green Flag: If the market closes above 2062 on a green day, indicating the potential voiding of the short-term weekly downtrend bias.
#DXY / $USD:
📈 Weekly: Cautious Bulls 🐂 📊 Daily: Cautious Bears 🐻
Analysis:
Last week, caution for bears was added because of the previous week's Thursday/Friday bounce.
Bulls didn't waste time and claimed 101.780 on Tuesday and triggered lime flag.
Over the next three days, bulls kept moving up and held the price above 101.780.
Closing the week in green prompts a change in the weekly bias to bullish.
However, Friday's attempt to close above 102.900 (1st green flag level) failed and couldn't close above 102.635 either.
Hence, caution is added to the bullish bias.
If Friday morning's flush continues on Sunday & Monday, we could see a red day.
Rejection of 102.900 & 102.635 could make bears hopeful.
A red day close below 101.340 makes it confident and changes the weekly bias to bearish.
On the other hand, if a green day closes above 102.900, the daily and weekly bias changes to bullish (no caution), and 104.025 is in play, potentially causing equities to slide down further faster.
Note that if the scenario of bears holding 102.740/102.900 works out on Sunday/Monday, that could help lift equities up.
The inverse correlation between USD and #NQ #ES still continues.
🔑 Key Levels:
Resistance: 102.635, 102.740/102.900, 104.025*, 104.265, 104.560
Support: 101.930, 101.340, 101.030, 100.550, 100.015, 99.750
Green Flags:
Keep an eye out for potential signs of a bullish reversal on green days:
Lime Flag: A close above 101.780 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.
Wish you are always on the right side of the market!
Disclaimer: This is NOT financial advice. I am NOT a financial advisor.
"I am from Barcelona, Spain, and I read you every week. Your newsletter is a very valuable reference for me. I have sadly read that you are going to stop publishing the weekly tasting for some time. I hope it serves you to recharge energies and come back with new ideas and enthusiasm. Please don't take too long!"
Safe travels and enjoy your time off. Your no-nonsense analysis and road-maps for NQ has always been spot-on and every Sunday I look forward to your newsletter. Big thanks!! Looking forward to your resumption in March! Take care.